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Question 66 Chapter 6 of +2-A
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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 He had withdrawn 15,000 and interest on his drawings was calculated as 1,200.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 | ||||
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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 |
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
