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The Capital Accounts of Moli and Golu Showed Balances of Rs 40,000 and Rs 20,000 as on April 01, 2016. - Accountancy

Ledger

The capital accounts of Moli and Golu showed balances of Rs 40,000 and Rs 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 Rs 10,000 to the firm on August 01, 2016. During the year, Moli withdrew Rs 1,000 per month at the beginning of every month whereas Golu withdrew Rs 1,000 per month at the end of every month. Profit for the year, before the above mentioned adjustments was Rs 20,950. Calculate interest on drawings show distribution of profits and prepare partner’s capital accounts.

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Solution

Interest on Moli’s Drawing = `"Total Drawings" × "Rate"/100 xx 13/(2 xx 12)`

`= 12000 xx 12/100 xx 13/(2 xx 12)`

= Rs 780

Interest on Golu’s Drawings =

`"Total Drawing" × "Rate"/100 xx 11/(2 xx 12)` 

`= 12000 xx 12/100 xx 11/(2 xx 12)`

= Rs 660

Profit and Loss Adjustment Account

Dr.                                                                                 Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss Account

20,950

Moli

4,000

 

6,000

Interest on Drawings

 

Golu

2,000

Moli

780

 

1,440

Interest on Partner’s Loan

 

Golu

660

Golu’s {10,000 × (6/100) × (8/12)}

400

 

Profit transferred to

 

Moli’s Capital {15,990 × (3/5)}

9,594

 

15,990

Golu’s Capital {15,990 × (2/5)}

6,396

 

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

  Is there an error in this question or solution?
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APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 2 Accounting for Partnership : Basic Concepts
Numerical Questions | Q 18 | Page 103
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