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Question
A, B and C were partners in a firm. On 1-4-2023 their capitals stood at ₹ 5,00,000, ₹ 2,50,000 and ₹ 2,50,000, respectively. As per the provisions of the partnership deed:
- Partners were entitled to interest on capital at 6% p.a.
- Profits were to be shared in the ratios of capitals.
The net profit for the year ended 31.3.2024 of ₹ 3,00,000 was divided equally without providing for the above items.
In the adjustment entry to rectify the error:
Options
Dr. A ₹ 50,000; Cr. B ₹ 25,000 and Cr. C ₹ 25,000
Cr. A ₹ 50,000; Dr. B ₹ 25,000 and Dr. C ₹ 25,000
Cr. A ₹ 10,000; Dr. B ₹ 5,000 and Dr. C ₹ 5,000
Cr. A ₹ 40,000; Dr. B ₹ 20,000 and Dr. C ₹ 20,000
MCQ
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Solution
Cr. A ₹ 50,000; Dr. B ₹ 25,000 and Dr. C ₹ 25,000
Explanation:
| Statement of Adjustment | ||||
| Particulars | A (₹) | B (₹) | C (₹) | Total (₹) |
| Interest on Capitals @ 6% p.a. | 30,000 | 15,000 | 15,000 | 60,000 |
| Balance Profit i.e., ₹ 3,00,000 − ₹ 60,000 = ₹ 2,40,000 distributed among partners in the ratio of 2: 1 : 1 | 1,20,000 | 60,000 | 60,000 | 2,40,000 |
| Net amount which should have been received (Cr.) | 1,50,000 | 75,000 | 75,000 | 3,00,000 |
| Less: Profit already distributed (Dr.) | 1,00,000 | 1,00,000 | 1,00,000 | 3,00,000 |
| (Cr.) 50,000 | (Dr.) 25,000 | (Dr.) 25,000 | − | |
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