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Question 7 Chapter 2 of Class 12 Part – 1 VK Publication

Question 7 Chapter 2 of Class 12 Part - 1 VK Publication
Question 7 Chapter 2 of Class 12 Part - 1 VK Publication

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Question 7 Chapter 2 of Class 12 Part – 1

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7. Chikki and Dinky were partners in a firm sharing profits in the ratio of 5:3. Their fixed capitals on 1-4-2017 were: Arun Rs. 1,02,000 and Arora Rs. 1,36,000. They agreed to allow interest on capital @ 12% p.a. and to charge on drawings @ 15% pa. The profit of the firm for the year ended 31-3-2018 before all above adjustments was Rs. 40,000. The drawings made by Chikki were Rs. 3,400 and by Dinky Rs. 6,800 during the year. Prepare Profit and Loss Appropriation Account of Chikki and Dinky. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs loss:

The solution of Question 7 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Appreciation Account

(For the year ended 31st March, 2018)

Particulars  AmountParticulars  Amount
To Interest on Capital A/c:  By Profit and Loss A/c (Net Profit) 40,000
Chikki12,240    
Dinky16,32028,560By Interest on Drawings  
To Profit Transferred To Capital A/C’s  Chikki255 
Chikki7,628 Dinky510765
Dinky4,57712,205   
  40,765  40,765

Working Notes:
1. Interest on Capital:
Chikki- 1,02,000 ×12/100 = Rs. 12,240
Dinky – 1,36,000 ×12/100 = Rs. 16,320
2. Interest on Drawings:
Chikki – 3,400 ×(15×6)/(100×12) = Rs. 255
Dinky – 6,800 ×(15×6)/(100×12) Rs. 510

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Also, Check out the solved question of all Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Chapter No. 1 – Accounting Not for Profit Organisations

Chapter No. 2 – Partnership Accounts – I (Introduction)

Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)

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Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)

Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)

Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)

Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)

Chapter No. 8 – Company Accounts (Share Capital)

Chapter No. 9 – Company Accounts (Issue of Debentures)

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Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Chapter No. 1 – Financial Statements of a Company

Chapter No. 2 – Financial Statement Analysis

Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size

Chapter No. 4 – Ratio Analysis

Chapter No. 5 – Cash Flow Statement

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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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