TS Grewal Solutions 2026-27 [Class 12] – Partnership Fundamentals – Q 21 to 30

Solution for Q 21 to 30 of Chapter 1 of T S Grewal Class 12 Accountancy 2026-27 are given below. These partnership fundamentals class 12 T S Grewal Solutions are based on topics partner capital accounts, fixed and fluctuating capital accounts, calculation of opening capital from closing capital, calculation if interest on capital.

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps. These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 21

Calculation of Interest on Capital

Kamal
Date	Amount	Period	Rate	Interest
01-Apr-25	500000	9	10%	37500	(50000010/1009/12)
01-Jan-26	600000	3	10%	15000	(60000010/1003/12)
			Total	52500

Kapil
Date	Amount	Period	Rate	Interest
01-Apr-25	500000	9	10%	37500	(50000010/1009/12)
01-Jan-26	400000	3	10%	10000	(40000010/1003/12)
			Total	47500

Journal Entries
Interest on Capital A/c Dr..	100000
To Kamal Current A/c		52500
To Kapil Current A/c		47500

Profit & Loss Appropriation A/c Dr..	100000
To Interest on Capital A/c		100000

Or a combined single
entry can be passed
Profit & Loss Appropriation A/c Dr..	100000
To Kamal Current A/c		52500
To Kapil Current A/c		47500

Profit & Loss Appropriation A/c
Particulars		Amount	Particulars	Amount
To Interest on Capital			By Net profit as per P&L	600000
Kamal	52500
Kapil	47500	100000


To Profit Transferred :
Kamal Current A/c	250000
Kapil Current A/c	250000	500000

Total		600000	Total	600000

Note :

In the absence of information the profit sharing ratio is assumed to be equal

Interest on capital and profit will be transferred to partners current A/c as fixed capital system is followed

Interest on capital will be calculated only for the period funds are actually used

Question 22

Interest on Capital A/c Dr..	20000
To Simran Current A/c		10000	(200000 X 5%)
To Reema Current A/c		10000	(200000 X 5%)
(Interest on Capital)

** In case fixed capital method is followed, interest on capital is calculated on fixed capital
Any balance in current A/c will be ignored

Profit & Loss Appropriation A/c Dr..	20000
To Interest on Capital A/c		20000
(Interest on Capital)

Profit & Loss Appropriation A/c Dr..	280000
To Simran Current A/c		168000
To Reema Current A/c		112000
(Share of Profits)

Profit & Loss Appropriation A/c
Particulars		Amount	Particulars	Amount
To Interest on Capital			By Net profit	300000
Simran	10000
Reema	10000	20000


To Profit Transferred :
Simran Current A/c	168000
Reema Current A/c	112000	280000

Total		300000	Total	300000

Note :

Interest on capital and profit will be transferred to partners current A/c as fixed capital system is followed

Question 23

Calculation of Interest on Capital
Description	Anita	Ankita
Capital as on 01-Apr-2025 (Opening)	500000	400000
Interest @ 10%	50000	40000

Journal Entries
Interest on Capital A/c Dr..	90000
To Anita Capital A/c		50000
To Ankita Capital A/c		40000
(Interest on Capital)

Profit & Loss Appropriation A/c Dr..	90000
To Interest on Capital A/c		90000
(Interest on Capital)

Question 24

Note:

First we will calculate opening capital as closing capital after drawings is given in question

Please note that here only drawings is adjusted in closing capital as per question

Capital given in question is only after drawings.

Int on capital and profits are not yet adjusted as per language of question

Calculation of Opening Capital
Description	Ashish	Aakash
Capital as on 31-Mar-2026 (Closing)	500000	600000
Add - Drawings	150000	100000

Opening Capital	650000	700000

Calculation of interest on capital
Interest @ 10%	65000	70000

Journal Entries
Interest on Capital A/c Dr..	135000
To Ashish Capital A/c		65000
To Aakash Capital A/c		70000
(Interest on Capital)

Profit & Loss Appropriation A/c Dr..	135000
To Interest on Capital A/c		135000
(Interest on Capital)

Alternately one single entry can be passed

Profit & Loss Appropriation A/c
Particulars		Amount	Particulars	Amount
To Interest on Capital			By Net profit as per P&L A/c	500000
Ashish	65000
Aakash	70000	135000

To Profit Transferred :
Ashish Capital A/c	219000
Aakash Capital A/c	146000	365000

Total		500000	Total	500000

Question 25

Note:

In this question nothing is mentioned whether fixed or fluctuating method is followed

In the absence of instructions fluctuating methos is considered

Calculation of opening capital
Description	Naresh	Sukesh
Closing Balance (31-Mar-2026)	300000	300000
Add - Drawings against capital	50000
Add - Drawings against Profits	100000	100000

Opening Capital	450000	400000

Calculation of interest on capital
Naresh
Date	Amount	Period	Rate	Interest
01-Apr-25	450000	6	10%	22500	(45000010/1006/12)
01-Oct-25	400000	6	10%	20000	(40000010/1006/12)
			Total	42500

Sukesh
Date	Amount	Period	Rate	Interest
01-Apr-25	400000	12	10%	40000	(400000*10/100)

			Total	40000

Journal Entries
Interest on Capital A/c Dr..	82500
To Naresh Capital A/c		42500
To Sukesh Capital A/c		40000
(Interest on Capital)

Profit & Loss Appropriation A/c Dr..	82500
To Interest on Capital A/c		82500
(Interest on Capital)

Profit & Loss Appropriation A/c Dr..	117500
To Naresh Capital A/c		58750
To Sukesh Capital A/c		58750

Note :

Partners profit sharing ratio is assumed to be equal

Concept :

Fixed or fluctuating capital method decides where you write the transactions.

So under fixed capital method opening capital, any additional capital, drawings against capital

are written on capital A/c. All the rest of the trasnactions are written in current account

But if fluctuating capital method is followed then all transactions are written in capital A/c

Whereas

Drawings against capital and drawings against profits decides on which amount the interest on capital is paid

So while calculaitng interest on capital drawings against capital is subtracted but drawings against profit is not subtracted

Note : Since nothing is written so we assume that they are following fluctuating capital A/c

Note : For Sukesh since the nature of drawings is not mentioned so we assume it as drawings against profits

Question 26

Calculation of Interest on Capital
Partner	Opening	Interest	Interest	Ratio	Profit
Name	Capital	Rate	Amount		Share
Parul	600000	12%	72000	3	54000
Rajul	800000	12%	96000	4	72000
		Total	168000

Note :

Available profits = Rs 126000

Interest on Capital = Rs 168000

Since Available profits < Interest on Capital, so profit sharing ratio not used

Available profits distributable in the ratio of interest on capital

Appropriation of Profits :

Parul	3	3/7*126000	54000
Rajul	4	4/7*126000	72000

Question 27

Calculation of Opening Capital
Description	A	B	Total
Closing Balance	160000	140000	300000	(Op Cap+Int on cap+profit share-drawings)
Add - Drawings	30000	30000	60000
Balance opening capital	190000	170000	360000	(Op Cap + (Int on cap + profit share)
(Inc Interest + Profit share)

Less - Profit share (Working Note)	37800	25200	63000

Balance opening capital (Inc Interest)		152200	144800	(Op Cap + Int on cap)
Opening Capital (without Interest)		138363.64	131636.36

For A	152200 X (10/110)
For B		131636 X (10/110)

Working Note :
Calculation of Profit share
Total opening capital (Inc Interest + Profit share)	360000

Less - Profit during the year (Inc Interest)	90000	(Int on cap + profit share)

Total Opening Capital (Exc int and profit share)	270000	(Opening cap for both partners)

Total Interest on Capital @ 10%	27000	(for both partners)

Now
Total Profits during the year	90000
Less - Interest on Capital	27000
Divisible Profits	63000

A's share	37800
B's share	25200

Calculation of Interest on Capital

Let the opening capital be Rs 100

Then Interest on Capital will be Rs 10

Then Opening capital before Interest will be Rs 110

Now , if Opening Capital with interest is Rs 110 then Opening capital without interest is Rs 100

If it is Rs 1 then opening capital without interest is Rs 100 / 110

If it is Rs AAAAA then opening capital without interest is (100/110 X AAAAA)

Question 28

Amit
Date	Amount	Period	Rate	Interest
01-Apr-25	1500000	6	8%	60000	1500000X8/100X6/12
01-Oct-25	1200000	6	8%	48000	1200000X8/100X6/12
			Total	108000

Bramit
Date	Amount	Period	Rate	Interest
01-Apr-25	900000	6	8%	36000	900000X8/100X6/12
01-Oct-25	1200000	6	8%	48000	1200000X8/100X6/12
			Total	84000

Question 29

Note :

The balance sheet in the question shows that fluctuating method is followed because there are on current accounts

Calculation of Interest on Capital
Description	Long	Short
Closing Balance	120000	140000
Add - Drawings	40000	50000
Less - Share of Profit	25000	25000
Opening Balance	135000	165000

Interest on Capital @ 8%	10800	13200

Note : Amount transferred to general reserve out of profit during the year will not be adjusted

as it is not yet distributed among the partners

Question 30

Part (i)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			50000
Less - Interest on Capital	0	0	0
Balance distributable Profits			50000

Profit share	30000	20000
	(50000*3/5)	(50000*2/5)

Part (ii)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			15000
Interest on Capital	10000	5000	15000
	(100000*10/100)	(50000*10/100)
Balance distributable Profits			0
Profit share	0	0

Part (iii)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			23000
Interest on Capital	12000	6000	18000
	(100000*12/100)	(50000*12/100)
Balance distributable Profits			5000
Profit share	3000	2000
	(5000*3/5)	(5000*2/5)

Part (iv)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			-8000	(loss)
Interest on Capital	0	0	0

Balance distributable Profits			-8000
Profit share	-4800	-3200
	(-8000*3/5)	(-8000*2/5)

Part (v)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			3000
Interest on Capital	5000	2500	7500
Ratio of appropriations	2	1	3

Distributable Profits			3000
Interest on Capital	2000	1000
	(3000*2/3)	(3000*1/3)

Note : in this case available distributable profits (Rs 3000) < Appropriations (Rs 7500)

So available profits to be distributed in the ratio of appropriations and the normal profit sharing ratio will not be used

Part (vi)
Description	Sumit	Namit	Total
Capital	100000	50000
Profit sharing ratio	3	2

Profits during the year			6000
Interest on Capital	5000	2500	7500
	(100000*5/100)	(50000*5/100)
Balance distributable Profits			-1500
Profit share	-900	-600
	(-1500*3/5)	(-1500*2/5)

Note :

In case of loss no interest is paid on capital

As per question interest on capital is to be treated as charge against profits

So even though the distributable profits are less but interest on capital will be paid.

Balance loss will be distributed in the normal profit sharing ratio

Q 1-10 | Q 11-20 | Q 21-30 | Q 31-40 | Q 41-50 | Q 51-60 | Q 61-70 | Q 71-80 | Q 81-92

T S Grewal Solutions – Partnership Firms Fundamentals – All Questions

T S Grewal Solutions Class 12 2026-27 – All Chapters

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