Question 6 Chapter 2 of +2-A - T.S. Grewal 12 Class Part

Question 6 Chapter 2 of +2-A

Table of Contents

The solution of Question 6 Chapter 2 of +2-A:

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

6. A and B are partners from 1st April 2018, without a Partnership Deed and they introduced capitals of ₹ 35,000 and ₹ 20,000 respectively. On 1st October 2018, A advanced loan of ₹ 8,000 to the firm without any agreement as to interest. The profit and Loss Account for the year ended 31st March 2019 shows a profit of ₹ 15,000 but the partners cannot agree on payment of interest and on the basis of division of profits.
You are required to divide the profits between them giving reasons for your method.

The solution of Question 6 Chapter 2 of +2-A:

Profit and Loss Adjustment Account A/c for the year ended 31st March 2019
Particulars	Amount	Particulars	Amount
To Interest on Harshad’s Loan*1	240	By Profit and Loss A/c	15,000
8,000 × (6/100) × (6/12)
To Profit and Loss Appropriation A/c (B. fig)	14,760
	15,000		15,000

Profit and Loss Appropriation Account A/c for the year ended 31st March 2019
Particulars	Amount	Particulars	Amount
To Harshad’s Capital A/c	7,380	By Profit and Loss Adjustment Account A/c	14,760
14,760 × 1/2
To Dhiman’s Capital A/c	7,380
14,760 × 1/2
	14,760		14,760

Working Note: –

*1:- Calculation of Total Interest on Loan
Interest on Loan = Value of Loan X Rate of Interest X Period
Value of Loan = 8,000
Rate of Interest = 6%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
= 8,000 X 6/100 X 6/12
Total Interest on Investment = 240/-

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

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
Chapter No. 3 – Goodwill: Nature and Valuation
Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
Chapter No. 5 – Admission of a Partner
Chapter No. 6 – Retirement/Death of a Partner
Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 1 – Financial Statements of a Company
Chapter No. 2 – Financial Statement Analysis
Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
Chapter No. 4 – Accounting Ratios
Chapter No. 5 – Cash Flow Statement

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