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Question
A, B, and C, sharing profits in the ratio of 2 : 2 : 1 have fixed capitals of ₹ 3,00,000, ₹ 2,00,000 and ₹ 1,00,000 respectively. After closing the accounts for the year ending 31st March, 2024, it was discovered that interest on capitals was provided @ 12% instead of 10% p.a. In the adjusting entry:
Options
Cr. A ₹ 1,200; Dr. B ₹ 800 and Dr. C ₹ 400
Dr. A ₹ 1,200; Cr. B ₹ 800 and Cr. C ₹ 400
Cr. A ₹ 800 ; Cr. B ₹ 400 and Dr. C ₹ 1,200
Dr. A ₹ 800; Dr. B ₹ 400 and Cr. C ₹ 1,200
MCQ
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Solution
Dr. A ₹ 1,200; Cr. B ₹ 800 and Cr. C ₹ 400
Explanation:
| Particulars | A (₹) | B (₹) | C (₹) | Total (₹) |
| Partners less credited with 2% interest | 6,000 | 4,000 | 2,000 | 12,000 |
| By allowing this interest, the profits of the firm will be reduced by 12,000. This loss will be divided in the ratio of 2 : 2 : 1. | 4,800 | 4,800 | 2,400 | 12,000 |
| (Dr.) 1,200 | (Cr.) 800 | (Cr.) 400 | − |
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