Question 6 Chapter 2 - Unimax Class 12 Part 1 - 2021

Question 6 Chapter 2 – Unimax Class 12 Part 1

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The solution of Question 6 Chapter 2 – Unimax Class 12 Part 1:

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

6. P and Q are partners sharing Profits and Losses in the ratio of 3:2 with their capitals on 1st January, 2021 as Rs. 300000 and Rs. 100000 respectively. Interest on Capital is allowed @ 5% per annum. Q is allowed an annual Salary of Rs. 3000 which he has not withdrawn. During 2021, the profit prior to calculation of interest but after charging Q’s salary amounted to Rs. 45000. Prepare Profit and Loss Appropriation Account showing allocation of profits.

The solution of Question 6 Chapter 2 – Unimax Class 12 Part 1:

Profit & Loss Appropriation Account For the year ended Dec. 31, 2006.

Particulars		Rs.	Particulars	Rs.
To Q’s Capital A/c (Salary)		3000	By Net Profit (45000 + 3000) (profit as per profit and loss A/c)	48000
To Interest on Capital A/c
– P	15000
– Q	5000	20000
To Profit transferred to Capital A/c
– P (25000 x 3/5)	15000
– Q (25000 x 2/5)	10000	25000

		48000		48000