Question

Amit, Sumit and Pulkit were partners sharing Profit & Loss in the ratio 5 : 3 : 2. Their Capitals were ₹ 8,00,000; ₹ 7,00,000 and ₹ 5,00,000 respectively. According to Partnership Deed:

1. Interest on Capital @ 10% p.a.
2. Salary to Amit ₹ 10,000 p.m and Pulkit ₹ 15,000 per quarter.
3. Commission to Sumit ₹ 70,000.
4. Sumit was being guaranteed that his share of profits will not be less than ₹ 65,000. Deficiency if any will be borne by Amit and Pulkit equally.

Ignoring the above terms the profits of ₹ 6,00,000, for the year ended March 31, 2025 were divided equally between partners. You are required to pass necessary adjustment entry. Show your workings clearly.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
Mar. 31, 2025	Pulkit’s Capital A/c    ...Dr.		70,000	-
	To Amit’s Capital A/c		-	65,000
	To Sumit’s Capital A/c		-	5,000
	(Being adjustment entry passed for omission)

Working Notes:

Particulars	Amit		Sumit		Pulkit		Firm
	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Profits wrongly shared	2,00,000	-	2,00,000	-	2,00,000	-	-	6,00,000
IOC omitted	-	80,000	-	70,000	-	50,000	2,00,000	-
Salary omitted	-	1,20,000	-	-	-	60,000	1,80,000	-
Commission	-	-	-	70,000	-	-	70,000	-
Profits to be shared	-	75,000	-	45,000	-	30,000	1,50,000	-
Guarantee effect	10,000	-	-	20,000	10,000	-	-	-
Total	2,10,000	2,75,000	2,00,000	2,05,000	2,10,000	1,40,000	6,00,000	6,00,000
	65,000 (Cr.)		5,000 (Cr.)		70,000 (Dr.)