[ISC] Q. 85 Solution of Fundamentals of Partnership Firms TS Grewal Book ISC (2026-27)

Solution of Question number 85 the Fundamentals of Partnership Accounts (Firm) chapter TS Grewal Book 2026-27 Edition ISC Board.

A. Paras and Mani started a partnership firm on 1st April, 2025 with capitals of 3,00,000 and ₹2,00,000 respectively.

Their Partnership Deed had following clauses:

(a) Interest is to be allowed on capital @ 10% p.a.
(b) Paras to get commission of 2% on sales.
(c) Interest to be charged on drawings @ 5% p.a.
(d) Profit-sharing ratio to be 3: 2.
Paras had withdrawn 60,000 during the year ended 31st March, 2026. Sale for the year was ₹ 25,00,000.

Drawings were accounted in the books but Interest on Drawings was omitted to be accounted. Net profit for the period was 50,000. Profit & Loss Appropriation Account for the period ended 31st March, 2026 was prepared and profit was appropriated.

You are required to:

(a) Prepare Profit & Loss Appropriation Account for the period ended 31st March, 2026 as would have been prepared earlier.

(b) Prepare Drawings Account of Paras.

B. At the beginning of the following year, the error of Interest on Drawings being not charged was noticed and was rectified by passing an adjustment entry.

You are required to pass the adjustment entry showing the working.

Solution:-