Question

X, Y and Z are partners sharing profits and losses in the ratio of 1 : 2 : 1. The current account balances were:

X: ₹ 5,000

Y: ₹ 2,000 (Dr.)

Z: ₹ 2,000

Drawings made by X, Y and Z were ₹ 2,60,000, ₹ 1,00,000 and ₹ 1,40,000, respectively, during the year. After the closing of the financial year ended on 31st March, 2025, the following errors were noticed.

1. Interest on drawings @ 10% p.a. was not charged.
2. Commission payable to X and Z was as follows:
   X: 5% of Net Profit
   Z: 4.5% of Net Profit
   Net profit for the year was ₹ 2,00,000
3. Salary payable to Y ₹ 5,000 quarterly was not provided.

Prepare current accounts of partners after rectifying the lapses in accounting.

Answer 1

Table showing Adjustment
Particulars	X	Y	Z	Total
Interest on Drawings @ 10% p.a. (Dr.)	13,000	5,000	7,000	25,000
Commission payable (Cr.)	10,000	-	9,000	19,000
Salary payable (Cr.)	-	20,000	-	20,000
Net amount recoverable or payable	(Dr.) 3,000	(Cr.) 15,000	(Cr.) 2,000	20,000
Division of the firm’s loss of ₹ 14,000	(Dr.) 3,500	(Dr.) 7,000	(Dr.) 3,500	14,000
Net Effect	(Dr.) 6,500	(Cr.) 8,000	(Dr.) 1,500

 

Dr.	Partner’s Current Accounts						Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To balance b/d	-	2,000	-	By balance b/d	5,000	-	12,000
To Y’s Current A/c	6,500	-	1,500	By X’s Current A/c	-	6,500	-
To balance c/d	-	6,000	10,500	By Z’s Current A/c	-	1,500	-
				By balance c/d	1,500	-	-
	6,500	8,000	12,000		6,500	8,000	12,000