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Question
K and L were partners in a firm sharing profits in the ratio of 3: 2. On 1.4.2014, their Balance Sheet was as follows :
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Capitals K 80,000 L 1,00,000 |
1,80,000 |
Sundry Assets
|
1,80,000
|
| 1,80,000 | 1,80,000 |
The Profit of for the year ended 31.3.2014, Rs 90,000 was divided between the partners without allowing interest on capital @ 6% per annum and a salary to K at Rs 4,000 per quarter. During the year K withdrew Rs 20,000 and L withdrew Rs 27,000.
Pass a single journal entry to rectify the error.
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Solution
| Journal | ||||
| Date | Particulars | L.F |
Dr. Rs |
Cr. Rs |
|
L’s Capital A/c Dr. To K’s Capital A/c Being rectification done for an omission of interest on capital and salary) |
4,228
|
4,228
|
||
Adjusting Table
| Particulars | K | L | Total |
| Interest on Capital to be credited @ 6% (Cr.) | 2,760 | 5,460 | 8,220 |
| Salary to K (Cr.) | 16,000 | - | 16,000 |
| Profit to be credited (Cr.) | 39,468 | 26,312 | 65,780 |
| Profit wrongly credited (Dr.) | 54,000 | 36,000 | 90,000 |
| Difference | 4,228 (Cr.) | 4,228 (Dr.) | Nil |
Calculation of Opening Capital
| Particulars | K | L |
|
Capital at the end Less: Profit already credited Add: Drawings already debited |
80,000 54,000 20,000 |
1,00,000 36,000 27,000 |
| Capital at the beginning | 46,000 | 91,000 |
Calculation on Interest on Capital
Interest on K's Capital : `46000 xx 6/100 = 2760`
Interst on L's Capital : `91000 xx 6/100 = 5460`
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|
Balance Sheet of Sanjay and Sameer as on 31.3.2011 |
||||
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
|
Capitals |
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|
|
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|
|
|
|
|
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|
||
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