Question 71 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 71 Chapter 2 of +2-A

Question 71 Chapter 2 of +2-A

  1. 71. A B and C are partners in a firm. Net profit of the firm for the year ended 31st March 2019 is
    30,000, which has been duly distributed among the partners, in their agreed ratio of 3: 1: 1.
    It is noticed on 10th April 2019 that the undermentioned transactions were not passed through the books of account of the firm for the year ended 31st March 2019.
  2. Interest on Capital @ 6% per annum, the capital of A, B and C being 50,000; 40,000 and 30,000 respectively.
  3. Interest on drawings: A 350; B 250; C 150.
  4. Partners’ Salaries: A 5,000; B 7,500.
  5. Commission due to A for some special transaction 3,000.
    You are required to pass a Journal entry, which will not affect Profit and Loss Account of the firm and rectify the position of partners inter se.

 

The solution of Question 71 Chapter 2 of +2-A

:

Date Particulars
L.F. Debit Credit
  A’s Capital A/c Dr   2,520  
  B’s Capital A/c Dr   2,740  
  To C’s Capital A/c       5,260
  (Being adjustment made)        

 


Working Note: –

 

 

Statement Showing Adjustment of Profit required
Particulars A

B

C

Total
Actual Amount of Interest on Capital @6% p.a. *2 3,000 2,400 1,800 7,200
Add: – Salary 5,000 7,500 12,500
Add: – Commission  3,000 3,000
Less: – Interest on Drawing – 350 – 250 – 150 – 750
Actual Amount to be credited 10,650 9,650 1,650 21,950
Less: wrongly Amount credited in Profit sharing ratio i.e. 3:1:1 13,170 4,390 4,390 21,950
  – 3,675 3,550  125
 

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

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

 

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

 

*2 Calculation of Actual Amount of Interest on A’s, B’s, & C’s Capital
Interest on Capital = Opening Capital X Rate of Interest



Interest on A’s Capital 50,000 X 6
100

Interest on A’s Capital = 3,000/-

Interest on B’s Capital 40,000 X 6
100

Interest on B’s Capital = 2,400/-

Interest on C’s Capital 30,000 X 6
100

Interest on C’s Capital = 1,800/-

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 71 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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