Class-12th account chapter 1 question 22 solution ts grewal

Q22. 

Kamal and Kapil are partners having fixed capitals of ₹ 5,00,000 each as on 1st April, 2023. Kamal introduced further capital of ₹ 1,00,000 on 1st January, 2024 whereas Kapil withdrew ₹ 1,00,000 on 1st January, 2024 out of capital.

Interest on capital is to be allowed @ 10% p.a.

The firm earned net profit of ₹ 6,00,000 for the year ended 31st March, 2024.

Pass the Journal entry for interest on capital and prepare Profit & Loss Appropriation Account.

[Ans.: Dr. Profit & Loss Appropriation A/c by ₹ 1,00,000;

Cr. Kamal’s Current A/c by ₹ 52,500 and Kapil’s Current A/c by ₹ 47,500;

Share of Profit: Kamal—₹ 2,50,000 and Kapil—₹ 2,50,000. ]

[Hint: Profit-sharing ratio between Kamal and Kapil is not given. Hence, they will share profit equally.]