Question 21:
Kamal and Kapil are partners having fixed capitals
of ₹ 5,00,000 each as on 1st April, 2025. Kamal introduced further
capital of ₹ 1,00,000 on 1st January, 2026 whereas Kapil withdrew ₹
1,00,000 on 1st January, 2026 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
2026.
Pass the Journal entry for interest on capital and prepare Profit and Loss
Appropriation Account.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( ₹) |
Credit ( ₹) |
|
|
2026 |
|
|
|
|
|
|
March 31 |
Profit & Loss Appropriation A/c |
Dr. |
|
1,00,000 |
|
|
|
To Kamal’s Current A/c |
|
|
|
55,000 |
|
|
To Kapil’s Current A/c |
|
|
|
45,000 |
|
|
(Interest on capital transferred to Profit & Loss Appropriation A/c) |
|
|
|
|
|
Profit and Loss Appropriation Account for the year ended 31 March 2026 |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
( ₹) |
Particulars |
( ₹) |
|
|
Interest on Capital A/c: |
|
Profit and Loss A/c |
6,00,000 |
|
|
Kamal’s Current A/c |
52,500 |
|
|
|
|
Kapil’s Current A/c |
47,500 |
1,00,000 |
|
|
|
Profit transferred to: |
|
|
|
|
|
Kamal’s Current A/c |
2,50,000 |
|
|
|
|
Kapil’s Current A/c |
2,50,000 |
5,00,000 |
|
|
|
|
6,00,000 |
|
6,00,000 |
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation
of Interest on Capital:
Kamal
= (5,00,000×10÷100×9÷12) + (6,00,000×10÷100×3÷12) = ₹. 52,500
Kapil=(5,00,000×10÷100×9÷12)+ (4,00,000×10÷100×3÷12) = ₹. 47,500
Question 22:
Simran and Reema are partners sharing
profits in the ratio of 3 : 2. Their capitals as on 1st April, 2025
were ₹ 2,00,000 each whereas Current Accounts had balances of ₹
50,000 and ₹ 25,000 respectively interest is to be allowed @ 5% p.a. on
balances in Capital Accounts. Net profit for the firm for the year ended for
the year ended 31st March 2026 was ₹ 3,00,000.
Pass the Journal entries for allowing interest on capital and distribution of
profit. Also prepare Profit and Loss Appropriation Account for the year.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( ₹) |
Credit ( ₹) |
|
|
|
Interest on capital A/c |
Dr. |
|
20,000 |
|
|
To Simran’s Current A/c |
10,000 |
||||
|
To Reema’s Current A/c |
10,000 |
||||
|
(Being interest on Capital allowed) |
|||||
|
Profit & Loss Appropriation A/c |
Dr. |
20,000 |
|||
|
Interest on Capital A/c |
20,000 |
||||
|
(Being interest transferred to profit and loss appropriation account) |
|||||
|
Alternative Jornal entry |
|||||
|
Profit & Loss Appropriation A/c |
Dr. |
|
20,000 |
||
|
|
To Simran’s Current A/c |
|
|
|
10,000 |
|
|
To Reema’s Current A/c |
|
|
|
10,000 |
|
|
(Interest on capital transferred to Profit & Loss Appropriation A/c) |
|
|
|
|
|
|
Profit & Loss Appropriation A/c |
|
|
2,80,000 |
|
|
|
To Simran’s Current A/c |
|
|
|
1,68,000 |
|
|
To Reema’s Current A/c |
|
|
|
1,12,000 |
|
|
(Profit transferred to Partners’ Current A/c) |
|
|
|
|
|
Profit and Loss Appropriation Account for the year ended 31 March 2026 |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
( ₹) |
Particulars |
( ₹) |
|
|
Interest on Capital A/c: |
|
Profit and Loss A/c |
3,00,000 |
|
|
Simran’s Current A/c |
10,000 |
|
|
|
|
Reema’s Current A/c |
10,000 |
20,000 |
|
|
|
Profit transferred to: |
|
|
|
|
|
Simran’s Current A/c |
1,68,000 |
|
|
|
|
Reema’s Current A/c |
1,12,000 |
2,80,000 |
|
|
|
|
3,00,000 |
|
3,00,000 |
|
|
|
|
|
|
|
Working Notes:
WN1:
Calculation of Interest on Capital
Simran's Interest on Capital = 2,00,000×5÷100=₹ 10,000
Reema's Interest on Capital = 2,00,000×5÷100=₹ 10,000
Fluctuating Capital
Question 23:
Anita and Ankita are partners sharing profits
equally. Their capitals, maintained following Fluctuating Capital Accounts
Method, as on 1st April, 2025 were ₹ 5,00,000 and ₹ 4,00,000
respectively. Partnership Deed provided to allow interest on capital @ 10% p.a.
The firm earned net profit of ₹ 2,00,000 for the year ended 31st March,
2026.
Pass the Journal entry for interest on capital.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( ₹) |
Credit ( ₹) |
|
|
2026 |
|
|
|
|
|
|
March 31 |
Profit & Loss Appropriation A/c |
Dr. |
|
90,000 |
|
|
|
To Anita’s Capital A/c |
|
|
|
50,000 |
|
|
To Ankita’s Capital A/c |
|
|
|
40,000 |
|
|
(Interest on capital transferred to Profit & Loss Appropriation A/c) |
|
|
|
|
Working Notes:
WN1:
Calculation of Interest on Capital
Anita's Interest on Capital = 5,00,000×10÷100=₹ 50,000
Ankita's Interest on Capital = 4,00,000×10÷100=₹ 40,000
Question 24:
Ashish and Aakash are partners sharing profit in the
ratio of 3 : 2. Their Capital Accounts showed a credit balance of ₹
5,00,000 and ₹ 6,00,000 respectively as on 31st March, 2026 after debit
of drawings during the year of ₹ 1,50,000 and ₹ 1,00,000
respectively. Net profit for the year ended 31st March, 2026 was ₹
5,00,000. Interest on capital is to be allowed @ 10% p.a.
Pass the Journal entry for interest on capital and prepare Profit and Loss
Appropriation Account.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( ₹) |
Credit ( ₹) |
|
|
2026 |
|
|
|
|
|
|
March 31 |
Profit & Loss Appropriation A/c |
Dr. |
|
1,35,000 |
|
|
|
To Ashish’s Capital A/c |
|
|
|
65,000 |
|
|
To Aakash’s Capital A/c |
|
|
|
70,000 |
|
|
(Interest on capital transferred to Profit & Loss Appropriation A/c) |
|
|
|
|
|
|
|
|
|
3,65,000 |
|
|
|
Profit & Loss Appropriation A/c |
|
|
|
2,19,000 |
|
|
To Ashish’s Capital A/c |
|
|
|
1,46,000 |
|
|
To Akash’s Capital A/c |
|
|
|
|
|
|
(Profit transferred to Partners’ Capital A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Appropriation Account for the year ended 31 March 2026 |
|||||
|
Dr. |
|
|
Cr. |
||
|
Particulars |
( ₹) |
Particulars |
( ₹) |
||
|
Interest on Capital A/c: |
|
Profit and Loss A/c |
5,00,000 |
||
|
Ashish |
65,000 |
|
|
|
|
|
Aakash |
70,000 |
1,35,000 |
|
|
|
|
Profit transferred to: |
|
|
|
||
|
Ashish’s Capital A/c |
2,19,000 |
|
|
|
|
|
Aakash’s Capital A/c |
1,46,000 |
3,65,000 |
|
|
|
|
|
5,00,000 |
|
5,00,000 |
||
|
|
|
|
|
||
Working Notes:
WN1: Calculation of Opening Capital:
|
Particulars |
Ashish |
Aakash |
|
Capital at the end |
5,00,000 |
6,00,000 |
|
Add: Drawings made |
1,50,000 |
1,00,000 |
|
Capital at the beginning |
6,50,000 |
7,00,000 |
WN2:
Calculation of Interest on Capital
Ashish's Interest on Capital = 6,50,000×10/100=₹ 65,000
Aakash's Interest on Capital = 7,00,000×10/100=₹ 70,000
Question 25:
Naresh and Sukesh are partners with capitals of ₹
3,00,000 each as on 31st March, 2026. Naresh had withdrawn ₹ 50,000
against capital on 1st October, 2026 and also ₹ 1,00,000 besides the
drawings against capital. Sukesh also had drawings of ₹ 1,00,000.
Interest on capital is to be allowed @ 10% p.a.
Net profit for the year was ₹ 2,00,000, which is yet to be distributed.
Pass the Journal entries for interest on capital and distribution of profit.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( ₹) |
Credit ( ₹) |
|
|
2026 |
|
|
|
|
|
|
March 31 |
Profit & Loss Appropriation A/c |
Dr. |
|
82,500 |
|
|
|
To Naresh’s Capital A/c |
|
|
|
42,500 |
|
|
To Sukesh’s Capital A/c |
|
|
|
40,000 |
|
|
(Interest on capital transferred to Profit & Loss Appropriation A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit & Loss Appropriation A/c |
Dr. |
|
1,17,500 |
|
|
|
To Naresh’s Capital A/c |
|
|
|
58,750 |
|
|
To Sukesh’s Capital A/c |
|
|
|
58,750 |
|
|
(Profit transferred to Partners’ Capital A/c) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation of Opening Capital:
|
Particulars |
Naresh |
Sukesh |
|
Capital at the end |
3,00,000 |
3,00,000 |
|
Add: Drawings out of capital |
50,000 |
- |
|
Add: Drawings against profit |
1,00,000 |
1,00,000 |
|
Capital at the beginning |
4,50,000 |
4,00,000 |
WN2: Calculation
of Interest on Capital
Naresh=(4,50,000×10×6/100×12)+(4,00,000×10×6/100×12)=₹ 42,500
Sukesh=4,00,000×10/100=₹ 40,000
Ts Grewal Solution 2026-2027
Click below for more Questions
Class 12 | Volume I
Chapter 1 – Accounting For Partnership Firms Fundamentals
Question No. 1 To 5
Question No. 6 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55
Question No. 56 To 60
Question No. 61 To 65
Question No. 66 To 70
Question No. 71 To 75
Question No. 76 To 80
Question No. 81 To 85
Question No. 86 To 90
Question No. 91 And 92