PROFIT AND LOSS APPROPRIATION ACCOUNT,CAPITAL ACCOUNT AND CURRENT ACCOUNT FULLY EXPLAINED .
CLASS 12TH ACCOUNTANCY.PARTNERSHIP FUNDAMENTALS.PARTNERSHIP ACCOUNTING. IN THIS VIDEO YOU WILL LEARN TO PREPARE A PROFIT AND LOSS APPROPRIATION ACCOUNT, CAPITAL PARTNERS ' ACCOUNT AND PARTNERS ' CURRENT ACCOUNT. KINDLY SHARE THIS VIDEO WITH YOUR FRIENDS ALSO.THANKS AND REGARDS.
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00:00Hello guys, hope you are doing well. This is Sonia Setia, your accounts and eco tutor.
00:07So, today's topic is class 12 accounts for students.
00:12In the first part, we took an example of how to create a profit and loss appropriation account,
00:21how to create a partner's capital account and how to create a partner's current account.
00:28So, in the first part, we almost completed the profit and loss appropriation account.
00:33From there, we are going to continue today.
00:36So, let's begin the video without wasting any time.
00:41So, let me open the file.
00:45Yeah, here you go.
00:49So, in the previous video, we saw how to create a profit and loss appropriation account, right?
00:58In which we took an example that X and Y are partners, right?
01:04Just give me a second.
01:11Yes.
01:12So, X and Y, we took that they are partners sharing profits and losses in the ratio of 7 is to 3.
01:19Their capital accounts as at 1st April 2020 stood at 5 lakhs and Y curve 4 lakhs.
01:29So, we saw the opening balance of capital, it was 5 lakhs and 4 lakhs.
01:34We gave interest of 5%.
01:37Drawings were 72,000 and 50,000.
01:41And we gave their profit before giving interest on capital and salary to Y.
01:49Our profit was 8 lakhs.
01:52And 10% said that we are going to transfer net profit to the general reserve.
01:58So, we saw the profit and loss appropriation account.
02:02Almost.
02:03Just.
02:09Check again.
02:11So, we transferred the profit to the general reserve.
02:17As we saw that 10% said that you have to take 10% of net profit.
02:25So, net profit was 8 lakhs.
02:28So, 10 profit becomes 80,000.
02:31We transferred 80,000 to the general reserve.
02:35So, 8 lakhs minus 45, minus 60, minus 80, we have the residual amount.
02:42That is the divisible profit.
02:44Right.
02:45That is 6 lakhs 15,000.
02:48So, you are going to divide this in the ratio of 7 is to 3.
02:53In 7 is to 3.
02:56So, if you distribute this in 7 is to 3.
02:59So, what will you get?
03:006 lakhs 15,000 into 7 by 10.
03:03And 6 lakhs 15,000 into 3 by 10.
03:07That would be 4 lakhs 30,500.
03:12And 1 lakh 84,500.
03:14Right.
03:15So, this is our complete profit and loss appropriation account.
03:19After that, we were going to see how to make the capital account of the partner.
03:24Right.
03:26So, the capital account of the partner.
03:28Just a minute.
03:31Yeah.
03:33So, how are we going to make the capital account of the partner?
03:40We are given the opening balance.
03:43Right.
03:44We are given the opening balance of the partner.
03:48X has 5 lakhs and Y has 4 lakhs.
03:51Right.
03:52So, because they have not introduced any additional capital.
03:57Right.
03:58So, that's why we didn't enter any transaction on the credit side.
04:03Right.
04:04And they have also done some drawings.
04:07But we are going to take that in the current account.
04:10Because here in the question, what did they say?
04:13What method are you following in the partnership form?
04:16That is fixed capital method.
04:18So, the capital of the partner in that is going to be fixed.
04:21You are going to show only two things.
04:24Opening balance of capital and closing balance of capital.
04:27That is same.
04:28So, your closing balance will also be the same.
04:315 lakhs and 4 lakhs.
04:33Right.
04:35Now, our current account is left.
04:37Right.
04:38So, let's see the current account.
04:42What are you going to take in the current account?
04:45Which transactions are you going to enter?
04:49Right.
04:50So, partner's current account.
04:54We have it.
04:56So, in this,
04:58You are going to enter all the remaining transactions except capital.
05:02So, by interest on capital.
05:04That is 25,000 and 20,000.
05:07How did we calculate this?
05:09Calculated on capital at the rate of 10%.
05:15No, I think it's 5%.
05:175%.
05:18Just give me a second.
05:20We will go upside and we will check the rate.
05:24Rate of interest on capital.
05:28That is interest is allowed.
05:32That is 5%.
05:34Okay.
05:35So, we have to calculate according to 5%.
05:38So, their capital is 5 lakhs and 4 lakhs.
05:43If you calculate 5% on 5 lakhs,
05:46What will you get?
05:4825,000.
05:52And if you calculate on 4 lakhs,
05:575%.
06:00That would be 20,000.
06:02Right.
06:03So, 25,000 and 20,000.
06:05They said that we have to give Y salary.
06:08Right.
06:09So, give Y salary.
06:11Because we are not giving any salary to X.
06:14You will leave its blank column.
06:16This is your amount column.
06:22And you will give salary to Y.
06:24That is 5,000 into 12.
06:26In yearly, we converted it.
06:29So, that would be 60,000.
06:32Right.
06:33So, by profit and loss appropriation.
06:35The profit and loss appropriation that we gave to X and Y.
06:40We are going to take that.
06:42You are going to give all this in their credit.
06:45Whatever is the income of the partners.
06:47You write it on the credit side in the partner's account.
06:51And whatever are their drawings.
06:53Or you are putting any expense on their head.
06:56You are putting a burden.
06:58You are going to write it on the debit side.
07:01Whatever you have to take from the partners.
07:06You are putting it on the debit side.
07:08Right.
07:09So, drawings.
07:10We wrote it.
07:1172,000 and 50,000.
07:13As mentioned in the question.
07:15Right.
07:16So, you have given the profit.
07:18Now, you will total it.
07:194,30,500 plus 25,000.
07:23That would be 4,55,500.
07:27Right.
07:28Total it.
07:2920,000, 60,000 and 1,84,000.
07:31It will become 2,64,500.
07:36So, from 4,55,500.
07:40You will subtract 72,000.
07:43So, your closing balance.
07:45How much will come?
07:46Of the current account.
07:47That is 3,83,500.
07:50And you have totaled it.
07:52You had 2,64,500.
07:56You are going to subtract 50,000 from this.
07:59And the closing balance is left.
08:01Of your current account.
08:02That is 2,14,500.
08:05Right.
08:06So, this was yours.
08:08How are you going to make a current account?
08:10How are you going to make a partner's capital account?
08:13And how are you going to make a profit and loss appropriation account?
08:18So, this is the part 2.
08:20I will mention.
08:21In the playlist.
08:23That this is part 2.
08:25And part 1.
08:26I have uploaded.
08:27Which I have uploaded on YouTube.
08:30And this is your part 2.
08:32If you have any issue.
08:35Any problem.
08:36It is difficult to understand.
08:38So, you can write me in the comment section.
08:40Surely, I will reply to your query.
08:44Right.
08:45So, hope you understood well.
08:47Kindly subscribe my channel.
08:50And thank you so much.
08:53Thank you.