Question 61 Chapter 2 of +2-A - T.S. Grewal 12 Class Part

Question 61 Chapter 2 of +2-A

Table of Contents

The solution of Question 61 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)

61. Ram, Mohan and Sohan sharing profits and losses equally have capitals of 1,20,000, 90,000 and 60,000 respectively. For the year ended 31st March 2019, interest was credited to them @ 6% instead of 5%.
Give adjustment Journal entry.

The solution of Question 61 Chapter 2 of +2-A:

Date	Particulars		L.F.	Debit	Credit
	Ram’s Capital A/c	Dr		300
	To Sohan’s Capital A/c				300
	(Being adjustment of Interest on partners′ capital made)

Working Note: –

Statement Showing Adjustment of Profit required
Particulars	Ram	Mohan	Sohan	Total
Actual Amount of Interest on Capital @5% p.a.	6,000	4,500	3,000	13,500
Less: Wrong Amount of Interest on Capital @6% p.a. credited	7,200	5,400	3,600	16,200
Extra Amount credited	– 1,200	– 900	– 600	-2,700
Less: Extra Amount credited in Profit sharing ratio i.e. 1:1:1	900	900	900	-2,700
	-300	–	300	–
	Ram get extra so we have to debit his capital a/c with difference amount		Sohan get less amount, so we have to credit his capital a/c with difference amount

Calculation of Actual Amount of Interest on Ram’s, Mohan’s, & Sohan’s Capital
Interest on Capital = Opening Capital X Rate of Interest

Interest on Ram’s Capital	=	1,20,000	X	5
				100

Interest on Ram’s Capital =6,000/-

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Interest on Mohan’s Capital	=	90,000	X	5
				100

Interest on Mohan’s Capital = 4,500/-

Interest on Sohan’s Capital	=	60,000	X	5
				100

Interest on Sohan’s Capital = 3,000 /-

Calculation of the Wrong Amount of Interest on Ram’s, Mohan’s, & Sohan’s Capital

Interest on Capital = Opening Capital X Rate of Interest

Interest on Ram’s Capital	=	1,20,000	X	6
				100

Interest on Ram’s Capital = 7,200/-

Interest on Mohan’s Capital	=	90,000	X	6
				100

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Interest on Mohan’s Capital = 5,400/-

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Interest on Sohan’s Capital	=	60,000	X	6
				100

Interest on Sohan’s Capital = 3,600 /-

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

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