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Question 8 Chapter 2 of +2-A
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
