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Question
Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following is the balance sheet of the firm as on March 31, 2017.
|
Liabilities |
Amount (Rs.) |
Amount (Rs.) |
Assets |
Amount (Rs.) |
Amount (Rs.) |
|
Mannu’s Capital |
30,000 |
40,000 | Drawings: | 6,000 | |
|
Shristhi’s Capital |
10,000 |
Mannu | 4,000 | ||
| Shristhi | 2,000 | ||||
| Other Assets | 34,000 | ||||
| 40,000 | 40,000 |
Profit for the year ended March 31, 2017 was Rs 5,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently inquired. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.
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Solution
|
Statement showing the Adjustment to be made |
||||||
|
Particulars |
Mannu |
Shrishti |
Firm |
|||
| Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | |
|
Interest on Capital |
1,350 | 400 | 1,750 | |||
|
Interest on Drawings |
120 | 60 | 180 | |||
| Loss to be debited (3 : 2) | 942 | 628 | 1,570 | |||
| 1,062 | 1,350 | 688 | 400 | 1,750 | 1,750 | |
| 288 (Cr) | 288 (Dr) | |||||
| Journal Entry |
||||
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| Shrishti’s Capital A/c ...Dr | 288 | |||
| To Mannu’s Capital A/c | 288 | |||
| (Being Omission of Interest on capitals drawings new rectified.) | ||||
Working Notes:
Calculation of opening capital of partner’s
Mannu’s opening capital = Closing capital + Drawings – Profit
= ₹ 30,000 – 5,000 × `3/5`
= ₹ 27,000
Shrishti’s opening Capital = Closing capital + Drawings – Profit
= ₹ 10,000 – 5,000 × `2/5`
= ₹ 8,000
Calculation of Interest on partner’s capital
Mannu’s Interest on capital = `27,000xx5%` = ₹ 1,350
Shrishti’s Interest on capital = `8,000xx5%` = ₹ 400
Calculation of Interest on partner’s drawings
Mannu’s Interest on drawings = `4,000xx6%xx6/12`
= ₹ 120
Shrishti’s Interest on drawings = `2,000xx6%xx6/12`
= ₹ 60
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| Particulars | (₹) | Particulars | (₹) |
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| Richa | ______ | ||
| Anmol | ______ | ||
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| ______ | ______ |
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| Particulars | (₹) | Particulars | (₹) |
| To Interest on Capital | By Profit & loss account (After manager’s commission) | ___(2)___ | |
| Richa | ______ | ||
| Anmol | ______ | ||
| To Anmol’s Salary a/c | 12,500 | ||
| To Profit transferred to: | |||
| Richa’s Capital A/C (1) | ___(1)___ | ||
| Anmol’s Capital A/c | ______ | ||
| ______ | ______ |
The amount to be reflected in blank (2) will be:
