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Puneet and Akshara Were Partners in a Firm Sharing Profits and Losses in the Ratio of 2:3. the Following Was the Balance Sheet of the Firm as on 31st March, 2019. - Accountancy

Journal Entry
Ledger

Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2: 3. The following was the balance sheet of the firm as on 31st March 2019.

Balance sheet of Puneet and Akshara as on 31st March 2019

Liabilities

Amount(₹)

Assets

Amount(₹)

Capitals:

 

Sundry Assets

2,00,000

Puneet  - 90,000

 

 

 

Akshara - 1,10,000

2,00,000

 

 

 

2,00,000

 

2,00,000

The profits 40,000 for the year ended 31st March 2019 were divided between the partners without allowing interest on capital @ 5% p.a. and commission to Akshara @ ₹ 1,000 per quarter.
The drawings of the partners during the year were :
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.

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Solution

In the books of Puneet and Akshara
Journal

Date Particulars   L.F. Debit Amount (₹)
Credit Amount (₹)
2019
Mar. 31
Puneet’s Capital A/c (WN1) Dr.

1,000
 
To Akshara’s Capital A/c
(Being interest on capital and commission not provided earlier, now rectified)
   
1,000
     

Working Notes: 

1)                                                  Statement showing Adjustment

Particulars Puneet Akshara Firm
Dr. (₹) Cr. (₹) Dr. (₹) Cr. (₹) Dr. (₹) Cr. (₹)
Profits wrongly distributed
16,000   24,000     40,000
Interest on capital to be   5,200   6,300 11,500  
provided (WN2)            
Comission to partner (1,000 × 4)       4,000 4,000  
Right distribution of profits   9,800   14,700 24,500  
Net Effect 1,000 (Dr.) 1,000 (Cr.)
Nil

2)                  Calculation of Opening Capital and interest on capital of the partners:

Particulars Puneet (₹) Akshara (₹)
Capital of the partner as on 31st March, 2019
90,000 1,10,000
Add: Drawings made by the partners (2,500 × 12) 30,000 (10,000 × 4) 40,000
Less: Profits distributed during the year 16,000 24,000
Opening Capital of the partners

1,04,000

1,26,000 
Interest on Capital @5% per annum

5,200

6,300 
  Is there an error in this question or solution?
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