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Question
Priti, Revti and Shristhi are partners in a firm sharing profits in 3 : 2 : 1. Their capital accounts on 1st April, 2023, stood at ₹ 6,00,000 each. Each partner withdrew ₹ 50,000 during the financial year 2023-24.
As per the provisions of their partnership deed:
- Interest on capital was to be allowed @ 5% per annum.
- Interest on drawings was to be charged @ 8% per annum.
The net profit for the year ended 31st March 2024 was divided amongst the partners without providing for the terms of the deed.
In the rectifying entry:
Options
Cr. Priti ₹ 14,000 and Dr. Shristhi ₹14,000
Dr. Priti ₹ 14,000 and Cr. Shristhi ₹ 14,000
Cr. Priti ₹ 13,000 and Dr. Shristhi ₹ 13,000
Dr. Priti ₹ 13,000 and Cr. Shristhi ₹ 13,000
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Solution
Dr. Priti ₹ 14,000 and Cr. Shristhi ₹ 14,000
Explanation:
Calculate Interest on Capital:
Interest on capital for each partners = `6,00,000 xx 5/100`
= ₹ 30,000
Interest on drawing for each partners = `50,000 xx 8/100 xx 6/12`
= ₹ 2,000
| Particulars | Priti (₹) | Revti (₹) | Shristhi (₹) | Firm (₹) |
| Interest on capitals (Cr.) | 30,000 | 30,000 | 30,000 | 90,000 |
| Interest on drawings (Dr.) | 2,000 | 2,000 | 2,000 | 6,000 |
| (Cr.) | 28,000 | 28,000 | 28,000 | 84,000 |
| Division of ₹ 84,000 in 3 : 2 : 1 (Dr.) | 42,000 | 28,000 | 14,000 | 84,000 |
| (Dr.) 14,000 | - | (Cr.) 14,000 | - |
