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Question 56 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 56 Chapter 2 of +2- Part-
Q-56 - CH-2 - Usha +2 Book 2018 - Solution

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Question 56 Chapter 2 of +2-Part-1

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56. (Profit and loss App. A/c, Partners Capital and Current A/c) Thread, Needle and Button are in partnership and during the year ended 31-3-2017, they earned a profit of Rs.83,000. Thread and Needle are entitled to get 10% p.a. interest on capital of Rs.60,000 and Rs.1,00,000 respectively. Button who has no capital in the firm is entitled to a salary of Rs.12,000 p.a. Button is also entitled to a commission of 10% on the profits after charging interest, salary and commission.
It is further agreed that the balance of profits should be appropriated as to 20% for charity fund and balance is shared equally by Thread and Needle.
Prepare profit and loss appropriation account and partners capital and current account for the year ended 31st March 2017, if the drawings of the partners during the year were Thread- Rs. 8,000; Needle-Rs.6,000 and Button- Rs.9,000.

The solution of Question 56 Chapter 2 of +2 Part-1: – 

Profit and Loss App. A/c
Particulars
AmountParticulars
Amount
To Interest on capital – Thread @10%6,000 By net profit B/d 83,000
-Needle @10%10,00016,000   
To Button’s Salary 12,000   
To Button’s Commission (WN1) 5,000   
To Charity Fund (WN2) 10,000   
      
To Net profit transferred to Capital a/cs     
-Thread- 1/220,000    
-Needle -1/220,00040,000   
  83,000  83,000

 

Partners’ Capital A/c
Particulars
ThreadNeedleParticulars
ThreadNeedle
    By Balance B/d 60,0001,00,000
To Balance c/d  60,0001,00,000    
  60,0001,00,000  60,0001,00,000

 

Partners’ Current A/c
Particulars
ThreadNeedleButtonParticulars
ThreadNeedleButton
To Drawings A/c 8,0006,0009,000By Interest on Capital A/c 6,00010,000
     By Commission 5,000
     By salary 12,000
     By P&L Appropriation A/c 20,00020,000 
To Balance c/d  18,00024,0008,000
     
  26,00030,00017,000
  26,00030,00017,000

Working Note: –

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1. Button’s Commission:

Button’s Commission

=10% of profits after charging interest, salary and commission
 =10/110 of (83,000-16,000-12,000)
 =10/110 of 55,000 = Rs. 5,000
   
2. Charity Fund:=20% of profits after charging all expenses
 =20% of ( 83,000-16,000-12,000-5,000)
 =20% of 50,000 = Rs. 10,000

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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