Question 52 Chapter 2 of +2-Part-1
52. (Profit and loss appropriation a/c, Partners Capital and Current a/c) On 1st January, 2017 Precious, Noble and Perfect entered into partnership with capitals of Rs.60,000, Rs.50,000 and Rs.30,000 respectively. Perfect advanced Rs.10,000 as loan to the partnership on 1st July, 2017. The partnership deed contained the following clauses:
1. Interest on capital @6% p.a.
2. Interest on drawings @6% p.a. Each drew Rs.4,000 at the end of each quarter commencing from 31st March 2017.
3. Working partners Precious and Noble to get salaries of Rs.200 and Rs.300 per month.
4. Interest on loan was given to Perfect @6% p.a.
5. Profits and losses are to be shared in the ratio of 4:2:1 up to Rs.70,000 and above Rs.70,000 equally.
Net profit of the firm for the year ended 31st December, 2017 (before any adjustments) was Rs.1,11,000.
Prepare the profit and loss Appropriation account and personal accounts of the partners assuming capital to be fixed.
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The solution of Question 52 Chapter 2 of +2 Part-1: –
|Profit and Loss Account A/c
|To Interest on capital Precious||3,600||By net profit
Rs.1,11,000-Rs300 (Interest on loan)
|-Noble||3,000||By Interest on drawings – Precious||360|
|To Salaries – Precious||2,400||-Perfect||360||1,080|
|To Net profit transferred to Capital a/cs|
|Next, Rs.27,380 (97,380-70,000)|
|Profit and Loss Account A/c
|By Balance B/d||60,000||50,000||30,000|
|To Balance c/d||60,000||50,000||30,000|
|Profit and Loss Account A/c|
|To Drawings A/c||16,000||16,000||16,000||By Balance B/d||3,600||3,000||1,800|
|To interest on Drawings A/c||360||360||360||By salary||2,400||3,600||–|
|By net profit||49,127||29,127||19,126|
|To Balance c/d||38,767||19,367||4,566|
Working Note: –
1. Calculation of Interest on Drawings of each partner :
|On 4,000 for 9 months:||180|
|On 4,000 for 6 months:||160|
|On 4,000 for 3 months:||60|
No interest will be charged on last drawings since it is at the end of the accounting year.
2. Interest on Perfect’s loan Rs.300 should be loan Rs.300 should be credited to interest on Perfect’s Loan account.
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Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I
- Chapter No. 3 – Partnership Accounts – II (Introduction)
- Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
- Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
- Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 2 – Techniques of Financial Statement Analysis
- Chapter No. 3 – Ratio Analysis
- Chapter No. 4 – Cash Flow Statement