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

Question 8 Chapter 2 of +2-A

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/c
for 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/c
for 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/c
for 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/c
for 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/-

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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

 

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2 Book 1 min - Question 8 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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