Question 65 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 65 Chapter 2 of +2-A

Question 65 Chapter 2 of +2-A

65. Piya and Bina are partners in firm sharing profits and losses in the ratio of 3 : 2. Following

Liabilities      Assets   
Capitals:     Sundry Assets 1,20,000
Piya 80,000      
Bina 40,000 1,20,000    
    1,20,000   1,20,000

 

The profits 30,000 for the year ended 31st March 2016 were divided between the partners without allowing interest on capital @ 12% p.a. salary to Piya @ 1,000 per month. During the year Piya withdrew 8,000 and Bina withdrew 4,000. Showing your working notes clearly, pass the necessary rectifying entry.

 

The solution of Question 65 Chapter 2 of +2-A

:

Date Particulars
L.F. Debit Credit
  Bina’s Capital A/c Dr   5,856  
  To Piya’s Capital A/c       5,856
  (Being adjustment of Interest on partners′ capital made)        

 


Working Note: –

 

Statement Showing Adjustment of Profit required
Particulars Amount of Mohan’s Capital

Amount of Vijay’s Capital

Capital at the end 80,000 40,000
Less: Profit already
Distributed (1:1:1)
18,000 12,000
Add: Drawings During the year 8,000 4,000
Capital at the beginning 70,000 32,000

 

Statement Showing Adjustment of Profit required
Particulars Piya

Bina

Total
Actual Amount of Interest on Capital @12% p.a. 8,400 3,840 12,240
Add: – Salary 1000 X 12months 12,000 12,000
Actual Amount to be credited 20,400 3,840 24,240
Less: wrongly Amount credited in Profit sharing ratio i.e. 3:2 14,544 9,696 24,240
  5,856 – 5,856
 

Piya get less amount, so we have to credit his capital a/c with difference amount

Bina get extra so we have to debit his capital a/c with difference amount

 

 

Calculation of Actual Amount of Interest on Piya’s & Bina’s Capital
Interest on Capital = Opening Capital X Rate of Interest



Interest on Piya’s Capital 70,000 X 12
100

Interest on Piya’s Capital = 8,400/-

Interest on Bina’s Capital 32,000 X 12
100

Interest on Bina’s Capital = 3,840/-

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 65 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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