# Question 62 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 62 Chapter 2 of +2-A

62. Ram, Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of 2: 1: 2.
Their capitals were fixed at 3,00,000, 1,00,000, 2,00,000. For the year ended 31st March, 2019, interest on capital was credited to them @ 9% instead of 10% p.a. The profit for the year before charging interest was 2,50,000.
Show your working notes clearly and pass necessary adjustment entry.

The solution of Question 62 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit Shyam’s Capital A/c Dr 200 Mohan’s Capital A/c Dr 400 To Ram’s Capital A/c 600 (Being adjustment of Interest on partners′ capital made)

Working Note: –

 Statement Showing Adjustment of Profit required Particulars Ram Shyam Mohan Total Actual Amount of Interest on Capital @10% p.a. 30,000 10,000 20,000 60,000 Less: Wrong Amount of Interest on Capital @9% p.a. credited 27,000 9,000 18,000 54,000 Extra Amount credited 3,000 1,000 2,000 6,000 Less: Extra Amount credited in Profit sharing ratio i.e. 2:1:2 2,400 1,200 2,400 6,000 Net effect -600 200 400 – Ram gets less amount, so we have to credit his capital a/c with difference amount Mohan get extra so we have to debit his capital a/c with difference amount Sohan get extra so we have to debit his capital a/c with difference amount

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

 Interest on Ram’s Capital = 3,00,000 X 10 100

Interest on Ram’s Capital =30,000/-

 Interest on Shyam’s Capital = 1,00,000 X 10 100

Interest on Shyam’s Capital = 10,000/-

 Interest on Mohan’s Capital = 2,00,000 X 10 100

Interest on Mohan’s Capital = 20,000 /-

Calculation of the Wrong Amount of Interest on Ram’s, Shyam’s, & Mohan’s Capital
Interest on Capital = Opening Capital X Rate of Interest

 Interest on Ram’s Capital = 3,00,000 X 9 100

Interest on Ram’s Capital = 27,000/-

 Interest on Shyam’s Capital = 1,00,000 X 9 100

Interest on Shyam’s Capital = 9,000/-

 Interest on Mohan’s Capital = 2,00,000 X 9 100

Interest on Mohan’s Capital = 18,000 /-

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. 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