Question

On the admission of Adil as a partner, the capitals of Rohan and Pavan, after all adjustments, were ₹ 50,000 and ₹ 40,000. Their capitals before Adil’s admission were ₹ 45,000 and ₹ 48,000.

The capital account of the partner having surplus capital was adjusted through his current account by passing the journal entry:

Options

• Debit Rohan’s Capital A/c ₹ 5,000; Credit Rohan’s Current A/c ₹ 5,000

• Debit Pavan’s Capital A/c ₹ 8,000; Credit Pavan’s Current A/c ₹ 8,000

• Debit Rohan’s Current A/c ₹ 5,000; Credit Rohan’s Capital A/c ₹ 5,000

• Debit Pavan’s Current A/c ₹ 8,000; Credit Pavan’s Capital A/c ₹ 8,000

Answer 1

Debit Pavan’s Capital A/c ₹ 8,000; Credit Pavan’s Current A/c ₹ 8,000

Explanation:

Pavan is the partner with surplus capital. His capital before the final adjustment was ₹ 48,000, but his required adjusted capital was only ₹ 40,000, resulting in an ₹ 8,000 surplus.