# Question 80 Chapter 2 of Class 12 Part – 1 VK Publication

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

Question 80 Chapter 2 of Class 12 Part – 1

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

Chapter No. 1 – Accounting Not for Profit Organisations

Chapter No. 2 – Partnership Accounts – I (Introduction)

Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)

Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)

Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)

Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)

Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)

Chapter No. 8 – Company Accounts (Share Capital)

Chapter No. 9 – Company Accounts (Issue of Debentures)

Chapter No. 10 – Company Accounts (Redemption of Debentures)

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

Chapter No. 1 – Financial Statements of a Company

Chapter No. 2 – Financial Statement Analysis

Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size