Question

17
1 po
Sonu and Romy are equal partners with fixed capital of Rs 4,00,000 and 3,00,000 respectively after
closing the account for the year ending 31st March 2019 it was discovered that interest on Capital was
provded @ 8% instead of 10% p.a. In the adjustment entry
la) sony will be credited by 8,000 and Romy will be credited by 6,000
(b) sony will be debited by 8.000 and Romy will be debited by 6,000
(c) sony will be debited by 1,000 and Romy will be credited by 1,000
(d) sony will be credited by 1,000 and Romy will be debited by 1,000
D A​

Answer 1

Sony will be credited by 1,000 and Romy will be debited by 1,000

Explanation:

Particulars                                     Sony                  Romy                Total

Interest @ 10%                               40,000              30,000            70,000

(-)Interest @ 8%                           (32,000)            (24,000)          (56,000)

Interest less credited                     8,000                6,000              14,000

(-)Profit wrongly distributed          (7000)               (7000)              (14000)

Net Effect                                        1000                (1000)               NIL

• So , the adjustment entry will be :

        Romy's  Capital A/c                  Dr.                        1,000

        To  Sony's Capital A/c                                                           1,000  

• Hence, Option (d) is correct.