15. A, B and Cwere partners in a firm. On 1st April 2018 their Fixed Capitals stood at 1,00,000,
50,000 and 50,000 respectively.
As per the provision of partnership deed,
(a) Partners were entitled to an annual salary of 20,000 each.
(b) Interest on capital @ 10% p.a. was to be provided.
(c) Profits were to be shared in the ratio 3:1:1. Net profit for the year ended 31" March, 2019
90,000
Pass Journal entries for the above in the books of the firm.
Answers
Answer:
a)Partners Salary a/c Dr ₹60,000
To A's Current a/c. ₹20,000
To B's Current a/c. ₹20,000
To C's Current a/c ₹20,000
(Being salary payable to partners)
b) P&L Appropriation a/c. Dr ₹60,000
To Partners Salary a/c. ₹60,000
(Being partners salary a/c written off)
c) Int. on Capital a/c. Dr ₹20,000
To A's Current a/c. ₹10,000
To B's Current a/c. ₹5,000
To C's Current a/c ₹5,000
(Being interest on partners capital payable)
d) P&L Appropriation a/c. Dr ₹20,000
To Int. on Capital a/c. ₹20,000
(Being interest on Capital a/c written off)
e) P&L Appropriation a/c. Dr ₹10,000
To A's Capital a/c. ₹6,000
To B's Capital a/c. ₹2,000
To C's Capital a/c. ₹2,000
(Being distributable profit distributed among partners in the ratio of 3:1:1)
Explanation:
Distributable profit =
₹90,000 - ₹60,000 - ₹20,000
₹10,000
I hope it helps :)