Question 7 Chapter 2 - Unimax Class 12 Part 1 - 2021

Question 7 Chapter 2 – Unimax Class 12 Part 1

Table of Contents

7. Pass necessary Journal entries and prepare Profit and Loss Appropriation Account of partnership firm (having partner A and B).

Profit during 2021 (before adjustments given below)	75000
Interest on Capital	A = Rs. 6000
	B = Rs. 3500
Interest on Drawings	A = Rs. 2800
	B = Rs. 2500
Salary Payable	A = Rs. 350 per month
	B = Rs. 550 per month
Transfer to General Reserve	Rs. 2000
Profit Sharing Ratio	3 : 2

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

Journal Enteries

Date	Particulars		L.F.	Debit	Credit
	Profit and Loss A/c	Dr.		75,000
	To Profit and Loss Appropriation A/c				75,000
	(Being balance of net profit transferred to profit and loss appropriation A/c)
	Interest on capital A/c	Dr.
	To A’s Capital A/c				6,000
	To B’s Capital A/c				3,500
	(Being interest on capital provided to partners A &B )
	Profit and Loss Appropriation A/c	Dr.		9,500
	To Interest on capital A/c				9,500
	(Being transfer of interest on capital to Profit and Loss Appropriation A/c)
	A’s capital A/c	Dr.		2,800
	B’s capital A/c	Dr.		2,500
	To Interest on Drawings A/c				5,300
	(Being interest charged on partners’s drawings)

Journal Enteries

Date	Particulars	L.F.	Debit	Credit
	Interest on Drawings A/c	Dr.	5,300
	To Profit and Loss Appropriation A/c			5,300
	(Being transfer of interest on drawings to profit and loss appropriation A/c)
	Salary A/c	Dr.	10800
	To A’s Capital A/c			4200
	To B’s Capital A/c			6600
	(Being Salary provided to partners A & B)
	Profit and Loss Appropriation A/c	Dr.	10800
	To Salary A/c			10800
	(Being transfer out of profit to general reserve)
	Profit and Loss Appropriation A/c	Dr.	58000
	To A’s Capital A/c			34800
	To B’s Capital A/c			23200
	(Being distribution of profit among partners A & B in 3:2)

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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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