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

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 alreadyDistributed (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)

• 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

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