Question 66 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 66 Chapter 6 of +2-A

Question 66 Chapter 6 of +2-A

66. P, Q and R were partners in a firm sharing profits in 2: 2: 1 ratio. The Partnership Deed provided that on the death of a partner his executors will be entitled to the following:
a Interest on Capital @ 12% p.a.
b Interest on Drawings @ 18% p.a.
c Salary of 12,000 p.a.
d Share in the profit of the firm up to the date of death on the basis of the previous year’s profit.
P died on 31st May 2018. His capital was 80,000. He had withdrawn 15,000 and interest on his drawings was calculated as 1,200. Profit of the firm for the previous year ended 31st March 2018 was 30,000. Prepare P’s Capital Account to be rendered to his executors.

 

 

The solution of Question 66 Chapter 6 of +2-A: –

 

Y’s Capital Account
Particular
Amount Particular Amount
To Drawings A/c 15,000 By Balance b/d 80,000
To Interest on Drawings A/c 1,200 By Interest on Capital A/c 1,600
To P’s Executor’s A/c 69,400 By Salary 12,000 × 2/12 2,000
    By Profit and Loss Suspense A/c 2,000
           
    85,600     85,600

 

 

Working Notes:

Calculation of Interest on Capital

P’s Capital Balance = Rs 80,000

Interest on Capital for 2 months = 80,000 X 12 X 2
100 12
             
  = Rs 1,600        

 

Calculation of P’s Share of Profit

Profit for last year = Rs 30,000

∴ P’s Share of Profit for 2 Months = 30,000 X 2 X 2
5 12
             
  = Rs 2,000        

 

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

 

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2 Book 1 min - Question 66 Chapter 6 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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