105. Xand 7are partners in the ratio of 3:2
Their fixed capitals are 3200,000 and
71,00,000 respectively. After cisoing the
Eccounts for the year ending 31st March
2019, it was discovered that interest on capital
was allowed @ 12% instead of 10% per
annum. By how much amount A will be
debited/credited in the adjustment entry
(A) 7600 Debit)
(B) 7400 (Credit
(C) 3400 (Debit)
(D) 7600 (Credit
Answers
Answer:
(i) Profit and Loss Adjustment a/c
Dr. Cr.
Particulars Amount Particulars Amount
To Manager's
Commission
(30000*5%) 1500 By Profit and loss a/c
(after Y's salary) 24000
To Profit transferred to
Profit and loss appropriation a/c 28500 By Y's salary 6000
30000 30000
(ii) Profit and Loss Appropriation a/c
( for the year ended 31st March, 2018)
Dr. Cr.
Particulars Amount Particulars Amount
To Salary to Y 6000 By Profit and Loss Adjustment a/c 28500
To Interest on Capital:
- X's Capital a/c
- Y's Capital a/c
4000
3000
To Profit transferred to:
- X's Capital a/c
- Y's Capital a/c
9300
6200
28500 28500
Explanation: