Question

Chitra and Divya were partners in a firm. Their respective fixed capitals were ₹ 15,00,000 and ₹ 10,00,000. The partnership deed provided interest on drawings @ 6% p.a.

During the year ended 31-3-2024, Chitra’s drawings were ₹ 10,000 per month, drawn at the end of every month, and Divya’s drawings were ₹ 30,000 per quarter, drawn at the beginning of every quarter.

Net profits for the year were distributed without taking into consideration the interest on drawings.

In the adjusting entry:

Options

• Cr. Chitra ₹ 600 and Dr. Divya ₹ 600

• Dr. Chitra ₹ 600 and Cr. Divya ₹ 600

• Cr. Chitra ₹ 300 and Dr. Divya ₹ 300

• Dr. Chitra ₹ 300 and Cr. Divya ₹ 300

Answer 1

Cr. Chitra ₹ 600 and Dr. Divya ₹ 600

Explanation:

Chitra’s total drawings = 10,000 × 12

= 1,20,000

Interest on chitra’s drawings = `1,20,000 xx 6/100 xx 5.5/12`

= 3,300

Divya’s total drawings = 30,000 × 4

= 1,20,000

Interest on chitra’s drawings = `1,20,000 xx 6/100 xx 7.5/12`

= 4,500

Adjustment Table
Particulars	Chitra (₹)	Divya (₹)	Total (₹)
Interest on drawings (Dr.)	3,300	4,500	7,800
Division of ₹ 7,800 in profit sharing ratio, i.e., equally (Cr.)	3,900	3,900	7,800
	(Cr.) 600	(Dr.) 600	-