Question 72 Chapter 2 of Class 12 Part - 1 VK Publication

Question 72 Chapter 2 of Class 12 Part – 1

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The solution of Question 72 Chapter 2 of Class 12 Part – 1: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

72. Cand D are partners sharing profits and losses in the ratio of 3:1. Following is the Balance Sheet of the firm as at 31st March, 2017:

Liabilities	Rs.	Assets		Rs.
Sundry creditors	20,000	Fixed Assets		1,02,000
C’s Capital A/c	90,000	Currents Assets		20,000
D’s Capital A/c	30,000	Drawings : C	12,000
		D	6,000	18,000
	1,40,000			1,40,000

Profit for the year ended 31st March, 2017 was Rs. 24,000 divided between the partners in their profit sharing ratio, but interest on capital at 5% pa. and on drawings at 6 p.a. was inadvertently ignored. Give the necessary adjustment entry for the adjustment of interest. Interest on drawings may be calculated on an average basis for 6 months.

The solution of Question 72 Chapter 2 of Class 12 Part – 1: –

Statement showing calculation of opening capital

Particulars	C Rs.	D Rs.
Capital at the end	90,000	30,000
Less: Share of Profit	18,000	6,000
Capitals in the beggining	72,000	24,000

In the given problem, drawing have not been added to closing capitals as they were never deducted from the opening capitals
Interest on Capitals:
C = 72,000 ×5/100= Rs. 3,600
D = 24,000 ×5/100= Rs. 1,200
Interest on Drawings:
C = 12,000 ×6/100×6/12 = Rs. 360
D = 6,000 ×6/100×6/12 = Rs. 180

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Table Adjustment

Particulars	C Rs.	D Rs.	Total Rs.
Interest on Capital A/c	3,600	1,200	4,800
Less: Interest on Drawings	360	180	540
(Cr.) (A)	3,240	1,020	4,260
Less: Net loss of the firm in the ratio of 3:2 (Dr.) (B)	3,195	1,065	4,260
Net Effect (A-B)	( Dr.) 45	(Cr.) 45	NIL

Adjustment Journal Entry

Date	Particular		L . F	Dr. ₹	Cr. ₹
	C’s Capital A/c	Dr.		45
	To D’s Capital A/c				45
	(Being partners’ capital account adjusted for interest on capital and drawings )