Question

1. Naresh, Suresh and Ramesh are partners. in the ratio of 4: 3: 2. Salary to Naresh 315,000 and to Ramesh 3,000 omitted and profits distributed. For rectification, now Naresh will be credited: (a) *15,000 (b) 1,000 (c) 12,000 (d)*7,000​

Answer 1

Given:

• Naresh, Suresh are Ramesh are partners in a firm, sharing profits and losses in the ratio 4:3:2.
• Salary to Naresh and Ramesh of Rs 15,000 and Rs 3,000 respectively, were omitted and the profits were distributed.

Objective: To rectify the error and find how much is to be credited to Naresh.

Answer:

Salaries to Naresh and Ramesh will be recorded on the credit side of the adjustment table [debit side of the firm's balance.]

• Any appropriations that were omitted are to be recorded on the credit side of the adjustment table [debit side of the firm's balance.]
• Any appropriations that were wrongly calculated are to be recorded on the debit side of the adjustment table [credit side of the firm's balance.]

Calculation of the profit/loss:

To determine profit/loss, observe the firm's balance. If the balancing figure appears on the debit side, it is profit. Else, loss.

Debit side = Rs 18,000

The balancing figure = Rs 18,000 [Cr.]

Calculation of loss distribution:

Since they share their profits and losses in the ratio 4:3:2, it is to be distributed accordingly.

For Naresh:

• Profit share = Rs 18,000 × 4/9 = Rs 8,000

For Suresh:

• Profit share = Rs 18,000 × 3/9 = Rs 6,000

For Ramesh:

• Profit share = Rs 18,000 × 2/9 = Rs 4,000

After the distribution of profit, balance each partners' figures.

Adjustment entry:

Suresh's capital A/c ... Dr - Rs 3,000

Ramesh's capital A/c ... Dr - Rs 4,000

• To Naresh's capital A/c - Rs 7,000

Therefore, Naresh will be credited (D) Rs 7,000.