# Question 8 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 8 Chapter 2 of +2-A

8. X and Y are partners sharing profits and losses in the ratio of 2 : 3 with capitals ₹ 2,00,000 and ₹ 3,00,000 respectively. On 1st October 2018, X and Y gave loans of ₹ 80,000 and ₹ 40,000 respectively to the firm. Show distribution of profits/losses for the year ended 31st March 2019 in each of the following alternative cases:
Case 1: If the profits before interest for the year amounted to ₹ 21,000.
Case 2: If the profits before interest for the year amounted to ₹ 3,000.
Case 3: If the profits before interest for the year amounted to ₹ 5,000.
Case 4: If the loss before interest for the year amounted to ₹ 1,400.

## The Solution of Question 8 Chapter 2 of +2-A:

### Case: -1

 Profit and Loss Appropriation Account A/cfor the year ended 31st March 2019 Particulars Amount Particulars Amount To Interest on X’s Loan 2,400 By Profit and Loss A/c 1,80,000 To Interest on Y’s Loan 1,200 To X’s Capital A/c 6,960 17,400 × 2/5 To Y’s Capital A/c 10,440 17,400 × 3/5 21,000 21,000

### Case: -2

 Profit and Loss Appropriation Account A/cfor the year ended 31st March 2019 Particulars Amount Particulars Amount To Interest on X’s Loan 2,400 By Profit and Loss A/c 3,000 To Interest on Y’s Loan 1,200 By X’s Capital A/c 240 600 × 2/5 By Y’s Capital A/c 360 600 × 3/5 3,600 3,600

### Case: -3

 Profit and Loss Appropriation Account A/cfor the year ended 31st March 2019 Particulars Amount Particulars Amount To Interest on X’s Loan 2,400 By Profit and Loss A/c 5,000 To Interest on Y’s Loan 1,200 To X’s Capital A/c 560 1,400 × 2/5 To Y’s Capital A/c 840 1,400 × 3/5 5,000 5,000

### Case: -4

 Profit and Loss Appropriation Account A/cfor the year ended 31st March 2019 Particulars Amount Particulars Amount To Profit and Loss A/c 1,400 To Interest on X’s Loan 2,400 To Interest on Y’s Loan 1,200 By X’s Capital A/c 2,000 5,000 × 2/5 By Y’s Capital A/c 3,000 5,000 × 3/5 5,000 5,000

### Working Note: –

#### Calculation of Total Interest on X’s Loan

Interest on Loan from X = Value of Loan X Rate of Interest X Period
Value of Loan = 80,000
Rate of Interest = 6%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(Date of Loan Taken to the end of Financial year.)

= 80,000 X 6/100 X 6/12
Total Interest on A’s Loan = 2,400/-

#### Calculation of Total Interest on Y’s Loan

Interest on Loan from Y = Value of Loan X Rate of Interest X Period
Value of Loan = 40,000
Rate of Interest = 6%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(Date of Loan Taken to the end of Financial year.)
= 40,000 X 6/100 X 6/12
Total Interest on Y’s Loan = 1,200/-

Comment if you have any questions.

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