Question 80 Chapter 2 of Class 12 Part - 1 VK Publication

Question 80 Chapter 2 of Class 12 Part – 1

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The solution of Question 80 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

80. D, E and Fare partners sharing profits and losses in the ratio of 3:2:1 with capitals Rs. 55,000, Rs. 35,000 and Rs. 20,000 respectively and their current account balances were D Rs. 5,500 (Cr.); E Rs. 2,500 (Dr.); F Rs. 750 (Cr.) as on 31st March, 2018. Interest to be provided on capitals and drawings is 5% p.a. and 6% p.a. respectively. Drawings made by partners D Rs. 5,000: E Rs. 3,000 and F Rs. 2,000.
Before closing the accounts, it was discovered that a car repair bill of D of Rs. 2,500 was charged to profit and loss Account. Also medical expenses of F of Rs. 1,200 were charged to the firm. The repair of machinery amounting to Rs. 35,000 has been debited to machinery account and depreciation at 10% has been charged on it. Profit earned during the year was Rs. 40,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018 and Partners Current Accounts.

The solution of Question 80 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Appreciation Account

For the year ended on 31st March 2017

Particulars		Amount	Particular		Amount
To Interest On Capital A/C:			By Profit And Loss A/C		39,200
D	2,750		By Interest on Drawings A/c
E	1,750		D	150
F	1,000	5,500	E	90
To Profit Transferred To Capital A/C’s			F	60	300
D	17,000
E	11,333
F	5,667	34,000
		39,500			39,50

Partner’s Capital Account

Particulars	D Rs.	E Rs.	F Rs.	Particular	D Rs.	E Rs.	F Rs.
To Balance b/d	–	2,500	–	By Balance b/d	5,500	–	750
To Drawings A/c	5,000	3,000	2,000`	By Interest on Capital A/c	2,750	1,750	1,000
To Interest on Drawings A/c	150	90	60	By Profit and loss App. A/c	17,000	11,333	5,667
To Repair Bill A/c	2,500	–	–
To Medical Expenses	–	–	1,200
To Balance c/d	17,600	7,493	4,157
	25,250	13,083	7,417		25,250	13,083	7,417

Working Note:

1. Calculation of distributable Profits :	Rs.	Rs.
Firm’s Profit		40,000
Add: Car Repair bill of D	2,500
Add: Medical Expenses of F	1,200	3,700
		43,700
Less: Repair of Machinery [5,000-500(Dep.)]		4,500
		39,200

2. Car Repair Bill of E and Medical Expenses of F are not considered as drawings as it is assumed that they are wrongly debited to Profit and Loss Account.

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