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Anju, Manju and Mamta Are Partners Whose Fixed Capitals Were Rs 10,000, Rs 8,000 and Rs 6,000, Respectively. - Accountancy

Journal Entry

Anju, Manju and Mamta are partners whose fixed capitals were Rs 10,000, Rs 8,000 and Rs 6,000, respectively. As per the partnership agreement, there is a provision for allowing interest on capitals @ 5% p.a. but entries for the same have not been made for the last three years. The profit sharing ratio during there years remained as follows:

Year

Anju

Manju

Mamta

2014

4

3

5

2015

3

2

1

2016

1

1

1

Make necessary and adjustment entry at the beginning of the fourth year i.e. Jan. 2017.

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Solution

Interest on Capital 

Anuj =`10000 xx 5/100 = "Rs"  500`

Manju = `8000 xx 5/100 = "Rs" 400`

Mamta = ` 6000 xx 5/100 = "Rs"  30`

Adjustment of profit

Year 2014

 

Anuj

Manju

Mamta

=

Total

Interest on Capital

500

400

300

 

1,200

Wrong distribution of Rs 1,200 (4:3:5)

(400)

(300)

(500)

=

(1,200)

 

100

100

(200)

 

NIL

Year 2015

 

Anuj

Manju

Mamta

=

Total

Interest on Capital

500

400

300

 

1,200

Wrong distribution of Rs 1,200 (3:2:1)

(600)

(400)

(200)

=

(1,200)

 

(100)

NIL

100

 

NIL

Year 2016

 

Anuj

Manju

Mamta

=

Total

Interest on Capital

500

400

300

 

1,200

Wrong distribution of Rs 1,200 (1:1:1)

(400)

(400)

(400)

=

(1,200)

 

100

NIL

(100)

 

NIL

Final Adjustment

 

Anuj

Manju

Mamta

2014

100

100

(200)

2015

(100)

NIL

100

2016

100

NIL

(100)

 

100

100

(200)

Adjusting Journal Entry

Date

 

Particulars

L.F

Debit Amount

Rs

Credit Amount

Rs

Jan. 2017

Mamta's Capital A/c                    Dr.
  To Anuj’s Capital A/c
  To Manju Capital A/c
(Adjustment of profit made)

 

200

100 

100

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APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 2 Accounting for Partnership : Basic Concepts
Numerical Questions | Q 43 | Page 108
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