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Question 84 Chapter 2 of Class 12 Part – 1 VK Publication

Question 84 Chapter 2 of Class 12 Part - 1 VK Publication
Question 84 Chapter 2 of Class 12 Part - 1 VK Publication

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Question 84 Chapter 2 of Class 12 Part – 1

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84. A, B and C are partners in a firm, sharing profits in the ratio of 2:1:1. It is agreed th interest on capital will be allowed at 5% per annum and interest on drawings will be charged at 4% per annum. (No Interest will be charged or allowed on Current Accounts) The following are the particulars of the Capital, Current and Drawings Accounts of the partners.

 A(Rs.)B(Rs.)C(Rs.)
Capital A/c (1st April, 2015)75,00040,00030,000
Current A/c (1st April, 2015)10,0005,0005,000(Dr.)
Drawings15,00010,00010,000
Interest on Drawings (31st March, 2016)500190350

The Profit and Loss Account for the year ended 31st March, 2016 showed a net profit of Rs. 60,000 before taking into account interest on capital and drawings and subject to the following adjustments:
(a) Life insurance premium of A amounting to Rs. 1,000 paid by the firm on 1st January, 2016 has been charged to Miscellaneous Expenditure Account
(b) Travelling expenses of Rs. 3,000 of B for a pleasure trip to Kashmir paid by the firm on 30th September, 2015 has been debited to Travelling Expenses Account.
(c) Repairs to machinery amounting to Rs. 10,000 has been debited to Plant Account and depreciation there on charged @20 %.
Prepare the Profit and Loss Appropriation Account for the year ending 31st March, 2016 and Current Accounts of the partners for the year.

The solution of Question 81 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Appreciation Account

For the year ended on 31st March 2016

Particulars 

 

Amount

Particular

 Amount
To Interest on Capital A/c:  By Profit and Loss A/c 56,000
A3,750 By Interest on Drawings  
B2,000 A510 
C1,5007,250B250 
To Profit Transferred To Current A/C’s  C3501,110
A24,930    
B12,465    
C12,46549,860   
  57,100  57,100

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Partner’s Capital Account

Particulars 

A Rs. 

B Rs.

C Rs.

Particular

A Rs. B Rs.C Rs.
To Balance b/d5,000By Balance b/d10,0005,000
To drawings A/c15,00010,00010,000By Salaries A/c3,7502,0001,500
To Interest on Drawings A/c510250350By P & L App. A/c24,93012,46512,465
To Insurance premium A/c1,000By balance c/d1,385
To Travelling Expenses A/c3,000    
To Balance c/d22,1706,215    
 38,68019,46515,350 38,68019,46515,350

Working Notes;
(1) Interest On Additional Drawings:
A’s Life Insurance Premium = Rs. 1,000
Interest On this Amonut ( Additional Drawing) = 1,000×4/100×3/12 = Rs. 10
B’s Life Insurance Premium = Rs. 3,000
Interest On this Amonut ( Additional Drawing) = 3,000×4/100×6/12 = Rs. 60
(2) Calculation of distributable profit among partner’s:

 (Rs.)(Rs.)
Firm’s Profit 60,000
Add: Life Insurance1,000 
Add: Tavelling Expenses3,0004,000
  64,000
Less: Repairs to Machinery10,000 
Depreciation @20%(2,000)8,000
  56,000

 

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Also, Check out the solved question of all Chapters: –

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

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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)

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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

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

Chapter No. 4 – Ratio Analysis

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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