# Question 71 Chapter 2 of Class 12 Part – 1 VK Publication

Question 71 Chapter 2 of Class 12 Part - 1 VK Publication

Question 71 Chapter 2 of Class 12 Part – 1

71. The capital accounts of Akhil and Nikhil stood at Rs. 42,000 and Rs. 32,000 respectively after the necessary adjustments in respect of the drawings and the net profit for the year. It was subsequently ascertained that interest on capital and on drawings @5% p.a. were not taken into account in arriving at the net profit. The drawings of partners had been: Akhil Rs. 1,200 drawn at the end of each quarter and Nikhil Rs. 1,800 drawn at the end of each half year.
The profit for year ended 31st March, 2017 as adjusted amounted to Rs. 22,000. The partners share profits in proportion of Akhil 3/5 and Nikhil 2/3. You are required to pass necessary journal entry and to show the adjusted capital accounts of the partners.

## The solution of Question 71 Chapter 2 of Class 12 Part – 1: –

For the calculation of interest on capital, opening capitals of the partnershave to be calculated.

Statement Showing calculation of opening capital

 Particulars M Rs. N Rs. Capital at the end 42,000 32,000 Add: Drawings made during the year 4,800 3,600 Less: Share of Profit (13,200) (8,800) Opening capitals 33,600 26,800

Interest on Capitals:
Akhil = 33,600 ×5/100= Rs. 1,680
Nikhil = 26,800 ×5/100= Rs. 1,340
Interest on Akhil’s Drawings by Product Method:

Product Method

 Date Rs. Product months Product ₹ (Amount X months) At end of 3 months 1,200 9 10,800 At end of 6 months 1,200 6 7,200 At end of 9 months 1,200 3 3,600 At end of 12 months 1,200 0 0 Total of Products 21,600

Interest on Drawings = Total Drawings×Rate/100×1/12
= 21,600 ×5/100×1/12 = Rs. 90
Interest on Akhil’s Drawings by Product Method:

Product Method

 Date Rs. Product months Product ₹ (Amount X months) At end of 6 months 1,800 6 10,800 At end of 12 months 1,800 0 0 Total of Products 10,800

Interest on Drawings = Total Drawings×Rate/100×1/12
= 10,800 ×5/100×1/12 = Rs. 45

 Particulars Akhil Rs. Nikhil  Rs. Total Rs. Interest on Capital A/c 1,680 1,340 3,020 Less: Interest on Drawings 90 45 135 (Cr.) (A) 1,590 1,295 2,885 Less: Net loss of the firm ( Rs. 2,885 in the ratio of 3:2) (Dr.) (B) 1,731 1,154 2,885 Net Effect (A-B) ( Dr.) 141 (Cr.) 141 NIL

 Date Particular L . F Dr. ₹ Cr. ₹ Akhil’s Capital A/c Dr. 141 To Nikhil’s Capital A/c 141 (Being partners’ capital account adjusted for interest on capital and drawings )

 Particular Akhil Nikhil Particular Akhil Nikhil To Nikhil’s Capital A/c 141 – By Balance b/d 42,000 32,000 To Balance c/d 41,859 32,141 By Akhil’s Capital A/c – 141

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## 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)

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)

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