Question

Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2: 3. The following was the balance sheet of the firm as on 31st March 2019.

Balance sheet of Puneet and Akshara as on 31^st March 2019

Liabilities	Amount(₹)	Assets	Amount(₹)
Capitals:		Sundry Assets	2,00,000
Puneet  - 90,000
Akshara - 1,10,000	2,00,000
	2,00,000		2,00,000

The profits 40,000 for the year ended 31^st March 2019 were divided between the partners without allowing interest on capital @ 5% p.a. and commission to Akshara @ ₹ 1,000 per quarter.
The drawings of the partners during the year were :
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.

Answer 1

In the books of Puneet and Akshara
Journal

Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019 Mar. 31	Puneet’s Capital A/c (WN1)	Dr.		1,000
	To Akshara’s Capital A/c (Being interest on capital and commission not provided earlier, now rectified)				1,000

Working Notes: 

1)                                                  Statement showing Adjustment

Particulars	Puneet		Akshara		Firm
	Dr. (₹)	Cr. (₹)	Dr. (₹)	Cr. (₹)	Dr. (₹)	Cr. (₹)
Profits wrongly distributed	16,000		24,000			40,000
Interest on capital to be		5,200		6,300	11,500
provided (WN2)
Comission to partner (1,000 × 4)				4,000	4,000
Right distribution of profits		9,800		14,700	24,500
Net Effect	1,000 (Dr.)		1,000 (Cr.)		Nil

2)                  Calculation of Opening Capital and interest on capital of the partners:

Particulars	Puneet (₹)	Akshara (₹)
Capital of the partner as on 31st March, 2019	90,000	1,10,000
Add: Drawings made by the partners	(2,500 × 12) 30,000	(10,000 × 4) 40,000
Less: Profits distributed during the year	16,000	24,000
Opening Capital of the partners	1,04,000	1,26,000
Interest on Capital @5% per annum	5,200	6,300