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

Question 62 Chapter 2 of +2-A

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)

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

2 Book 1 min - Question 62 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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