Question

Anil, Sunil, and Sanjay have omitted interest on capital for the two years ended on 31st March, 2024. Their fixed capitals in two years were Anil ₹ 8,00,000, Sunil ₹ 7,00,000, and Sanjay ₹ 3,00,000. The rate of interest on capital is 10% p.a. Their profit sharing ratios were in the first year 4 : 3 : 2 and in the second year 3 : 2 : 1.

Give the necessary adjusting entry at the beginning of next year.

Answer 1

Particulars	Anil (Cr.)	Sunil (Cr.)	Sanjay (Cr.)	Total
Interest on Capitals @ 12% p.a
For the first year	80,000	70,000	30,000	1,80,000
For the second year	80,000	70,000	30,000	1,80,000
Total amount payable (Cr.)	1,60,000	1,40,000	60,000	3,60,000
	Dr.	Dr.	Dr.	Total
Division of the firm’s loss will be as under:
For the first year in the ratio of 4 : 3 : 2	80,000	60,000	40,000	1,80,000
For the second year in the ratio of 3 : 2 : 1	90,000	60,000	30,000	1,80,000
Total Loss (Dr.)	1,70,000	1,20,000	70,000	3,60,000

 

Journal Entry
Date	Particulars	L.F	Debit (₹)	Credit (₹)
2025
April 1	Anil’s Capital A/c   ...Dr.		10,000	-
	Sanjay’s Capital A/c   ...Dr.		10,000	-
	To Sunil’s Capital A/c		-	20,000
	(Being an adjustment for omission of two years’ interest on capital.)