Question 87 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 87 Chapter 2 of +2-A

Question 87 Chapter 2 of +2-A

87. P, Q and R entered into partnership on 1st April, 2015 to share profits and losses in the ratio of 12 : 8 : 5. It was provided that in no case R’s share in profit be less then 30,000 p.a. The profits and losses for the period ended 31st March were: 2015-16 Profit 1,20,000 2016-17 Profit 1,80,000; 2017-18 Loss 1,20,000.
Pass the necessary Journal entries in the books of the firm.

The solution of Question 87 Chapter 2 of +2-A

:

 

Date Particulars
L.F. Debit Credit
  P’s Capital A/c*1 Dr   3,600  
  Q’s Capital A/c *1 Dr   2,400  
  To R’s Capital A/c       6,000
  (Being adjustment made for deficiency of R’s Capital)        
           
  P’s Capital A/c *3 Dr   32,400  
  Q’s Capital A/c *3 Dr   21,600  
  To R’s Capital A/c       54,000
  (Being adjustment made for deficiency of R’s Capital)        

 


Working Note: –

*1 Calculation of R’s share of Profits
Profit of 2015-16 = 1,20,000


R’s Share of Profit =1,20,000 X 5
25

R’s Share of Profit = 24,000

R’s Minimum Guaranteed Profit = Rs 30,000
R’s Actual Profit Share i.e. 24,000 is less than his Minimum Guaranteed Profit i.e. 30,000
Deficiency in R’s Profit Share= 30,000 − 24,000= Rs 6,000

This deficiency of Rs 10,000 is to be borne by P & Q in the ratio of 12:8.

P’s Share of Profit =6,000 X 12
20


P’s Share of Profit = 3,600

Q’s Share of Profit =6,000 X 8
20

Q’s Share of Profit = 2,400

*2 Calculation of R’s share of Profits
Profit of 2016-17 = 1,80,000



R’s Share of Profit 1,80,000 X 5
25

R’s Share of Profit = 36,000
R’s Minimum Guaranteed Profit = Rs 30,000
So, In this year no Deficiency in R’s Profit Share

 

*3 Calculation of R’s share of Profits

Loss of 2015-16 = 1,20,000

R’s Share of Profit =1,20,000 X 5
25

R’s Share of Profit =  24,000
R’s Minimum Guaranteed Profit = Rs 30,000
R’s Actual loss Share i.e. 24,000 is less than his Minimum Guaranteed Profit i.e. 30,000
Deficiency in R’s Profit Share = 30,000 − (-24,000) = Rs 54,000
This deficiency of Rs 54,000 is to be borne by P & Q in the ratio of 12:8.



P’s Share of Profit =54,000 X 12
20 

P’s Share of Profit = 32,400

Q’s Share of Profit =54,000 X 8
20 


Q’s Share of Profit= 21,600




 

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 - Question 87 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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