Question

A, B, C and D are partners sharing profits in 2 : 2 : 1 : 1. They distributed the profit for the year ending 31st March 2024, ₹ 9,00,000, without providing for the following:

1. Salary to A @ 15,000 per month.
2. Salary to B and D @ ₹ 30,000 per quarter to each partner.

Give the necessary adjusting journal entry.

Answer 1

Table showing adjustment					Amounts (₹)
	A	B	C	D	Total
Salary to be credited	1,80,000	1,20,000	-	1,20,000	4,20,000
Division of ₹ 4,20,000 in 2 : 2 : 1 : 1	1,40,000	1,40,000	70,000	70,000	4,20,000
Difference	(Cr) 40,000	(Dr) 20,000	(Dr) 70,000	(Cr) 50,000	-

Profit of ₹ 9,00,000 given in the question will be ignored. It will be taken into consideration only when it has been distributed in the wrong profit-sharing ratio.

Rectifying journal entry:

Date	Particulars	L.F	Debit (₹)	Credit (₹)
	B’s Capital A/c   ...Dr.		20,000	-
	C’s Capital A/c   ...Dr.		70,000	-
	To A’s Capital A/c		-	40,000
	To D’s Capital A/c		-	50,000
	(Being an adjustment for the omission of the partner’s salaries.)