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Question 81 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 81 Chapter 2 of +2-A
Question No.81 - Chapter No.2 - T.S. Grewal +2 Book 2019-Solution

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Question 81 Chapter 2 of +2-A

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81. A, B and C are partners sharing profits in the ratio of 5 : 4: 1. C is given a guarantee that his minimum share of profit in any given year would be at least 5,000. Deficiency, if any, would be borne by A and B equally. Profit for the year ended 31st March 2019 was 40,000.
Pass necessary Journal entries in the books of the firm.

The solution of Question 81 Chapter 2 of +2-A:

Balance Sheet (for the year ended 31st March 2019)
Liabilities
AmountAssets
Amount
   By Profit and Loss A/c40,000
To Profit Transferred to *2    
A’s Capital A/c19,500   
B’s Capital A/c15,500   
C’s Capital A/c5,000 40,000  
  40,000  40,000

Working Note: –

Calculation of Actual Amount of Interest on A’s, B’s, & C’s Capital
Profit for 2018= 40,000
Profit-sharing ratio 5: 4: 1

Interest on A’s Capital40,000X5
10

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Interest on A’s Capital = 20,000/-

Interest on B’s Capital40,000X4
10

Interest on B’s Capital = 16,000/-

Interest on C’s Capital=40,000X1
10

Interest on C’s Capital = 4,000 /-

C’s Actual Profit Share i. e. Rs 4,000 is less than his Minimum Guaranteed Profit i. e. Rs 5,000
Deficiency in C’s Profit Share = = 5,000 − 4,000 = Rs 1,000
This deficiency is to be borne by A and B equally.
This deficiency of Rs 1,000 is to be borne by A and B equally.

A’s Share of Profit1,000X1
2

A’s Share of Profit = 500

B’s Share of Profit1,000X1
2

B’s Share of Profit= 500


Now, Final distributed among the partners

A’s Share of Profit=20,000500=19,500
B’s Share of Profit=16,000500=15,500
C’s Share of Profit=4,000+1,000=5,000

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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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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