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Question -

The capital accounts of Moli and Golu showed balances of ₹ 40,000 and ₹ 20,000 as on April 01, 2016. They shared profits in the ratio of 3:2. They allowed interest on capital @ 10% p.a. and interest on drawings, @ 12 p.a. Golu advanced a loan of ₹ 10,000 to the firm on August 01, 2016. During the year, Moli withdrew ₹ 1,000 per month at the beginning of every month whereas Golu withdrew ₹ 1,000 per month at the end of every month. Profit for the year, before the above mentioned adjustments was ₹ 20,950. Calculate interest on drawings show distribution of profits and prepare partner’s capital accounts.



Answer -

Profit and Loss Adjustment Account

Dr.

 

 

 

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Interest on Capital

 

 

Profit and Loss Account

 

20,950

Moli

4,000

 

Interest on Drawings

 

 

Golu

2,000

6,000

Moli

780

 

 

 

 

Golu

660

1,440

Interest on Partner’s Loan

 

 

 

 

 

Golu’s {10,000 × (6/100) × (8/12)}

400

 

 

 

 

 

 

 

 

 

Profit transferred to

 

 

 

 

Moli’s Capital {15,990 × (3/5)}

9,594

 

 

 

 

Golu’s Capital {15,990 × (2/5)}

6,396

15,990

 

 

 

 

 

 

 

 

 

 

 

22,390

 

 

22,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partners’ Capital Account

Dr.

 

 

 

 

Cr.

Particulars

Moli

Golu

Particulars

Moli

Golu

Drawings

12,000

12,000

Balance b/d

40,000

20,000

Interest on Drawing

780

660

Interest on Capital

4,000

2,000

Balance c/d

40,814

15,736

Profit and Loss Adjustment

9,544

6,396

 

 

 

 

 

 

 

 

 

 

 

 

 

53,594

28,396

 

53,594

28,396

 

 

 

 

 

 

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