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

Question 62 Chapter 2 of +2-A
Question No.62 - Chapter No.2 - T.S. Grewal +2 Book 2019-Solution

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Question 62 Chapter 2 of +2-A

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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:

DateParticulars
L.F.DebitCredit
 Shyam’s Capital A/cDr 200 
 Mohan’s Capital A/cDr 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.30,00010,00020,00060,000
Less: Wrong Amount of Interest on Capital @9% p.a. credited27,0009,00018,00054,000
Extra Amount credited3,0001,0002,0006,000
Less: Extra Amount credited in Profit sharing ratio i.e. 2:1:22,4001,2002,4006,000
Net effect-600200400
 

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 Capital3,00,000X10
100

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Interest on Ram’s Capital =30,000/-

Interest on Shyam’s Capital1,00,000X10
100

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

Interest on Mohan’s Capital2,00,000X10
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 Capital3,00,000X9
100

Interest on Ram’s Capital = 27,000/-

Interest on Shyam’s Capital1,00,000X9
100

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Interest on Shyam’s Capital = 9,000/-

Interest on Mohan’s Capital2,00,000X9
100

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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
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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