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
|To Interest On Capital A/C:||By Profit And Loss A/C||39,200|
|D||2,750||By Interest on Drawings A/c|
|To Profit Transferred To Capital A/C’s||F||60||300|
Partner’s Capital Account
|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|
|1. Calculation of distributable Profits :||Rs.||Rs.|
|Add: Car Repair bill of D||2,500|
|Add: Medical Expenses of F||1,200||3,700|
|Less: Repair of Machinery [5,000-500(Dep.)]||4,500|
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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Also, Check out the solved question of all Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution