Question 72 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 72 Chapter 2 of +2-A

Question 72 Chapter 2 of +2-A

72. On 31st March 2014, the balances in the Capital Accounts of Saroj, Mahinder and Umar after
making adjustments for profits and drawings, etc., were 80,000, 60,000, 40,000
respectively. Subsequently, it was discovered that the interest on capital and drawings has been omitted.

  1. The profit for the year ended 31st March 2014 was 80,000.
  2. During the year Saroj and Mahinder each withdrew a sum of 24,000 in equal instalments at the end of each month and Umar withdrew 36,000.
  3. The interest on drawings was to be charged @ 5% p.a. and interest on capital was to be allowed @ 10% p.a.
  4. The profit-sharing ratio among partners was 4 : 3: 1.
    Showing your workings clearly, pass the necessary rectifying entry.

 

 

The solution of Question 72 Chapter 2 of +2-A

:

Date Particulars
L.F. Debit Credit
  Saroj’s Capital A/c Dr   2,350  
  Mahinder’s Capital A/c Dr   1,300  
  To Umar’s Capital A/c       3,650
  (Being adjustment made)        

 


Working Note: –

 

Statement Showing Adjustment of Profit required
Particulars Amount of Saroj’s Capital

Amount of Mahinder’s Capital

Amount of Umar’s Capital

Capital at the end 80,000 60,000 40,000
Less: Profit already
Distributed (4:3:1)
40,000 30,000 10,000
Add: Drawings During the year 24,000 24,000 36,000
Capital at the beginning 64,000 54,000 66,000

 

Statement Showing Adjustment of Profit required
Particulars Piya Mahinder Umar Total
Actual Amount of Interest on Capital @6% p.a. *2 6,400 5,400 6,600 18, 400
Less: – Interest on Drawing – 550 – 550 – 900 – 2,000
Actual Amount to be credited 5,850 4,850 5,700 21,950
Less: wrongly Amount credited in Profit sharing ratio i.e. 4:3:1 8,200 6,150 2,050 21,950
  – 2,350 -1,300 3,650
 

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

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

 

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

 

Calculation of Actual Amount of Interest on Piya’s & Bina’s Capital
Interest on Capital = Opening Capital X Rate of Interest



Interest on Saroj’s Capital 64,000 X 10
100

Interest on Saroj’s Capital = 6,400/-

Interest on Mahinder’s Capital 54,000 X 10
100

Interest on Mahinder’s Capital = 5,400/-

Interest on Umar’s Capital 66,000 X 10
100

Interest on Umar’s Capital = 6,600/-

 

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 72 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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