Question

21. R and S were partners in a firm sharing profits in 3.2 ratio. Their respective fixed capitals were Rs. 10,00,000
and 15.00,000. The partnership deed provided the following:
(a) Interest on capital @ 10% p.a.
(b) Interest on drawing @ 12% p.a.
During the year ended 31-3-2013, R's drawing were Rs. 1,000 per month drawn at the end of every month
and S's drawings were Rs. 2,000 per month drawn in the beginning of every month. After the preparation of
final accounts for the yenr ended 31-3-2013 it was discovered that interest on R's drawings was not taken into
consideration
Calculate interest on R's drawings and give necessary adjusting entry for the same,​

Answer 1

Answer:

2,640

Explanation:

calculation of intrest on r's drawings:

total drawings for the year 10,000×12=1,20,000

when equal amont is withdrawn at the end of every month,intrest is calculated for an average period of 5.5 months

intrest on drawings=1,20,000×12%×5.5/12= rs6,600

table showing adjustment

R S total

iod (dr.) 6,600 --- 6,600

divison in ratio 3,960 2,640 6,600

(cr.)

difference dr.2,640 cr.2,640 --------

adjustment entry

R's current a/c dr. 2,640

to S's current a/c 2,640

(adjustment of omission of intrest on drawings)

Answer 2

Answer:

Explanation:

                             Journal Entries

Date                      Particulars                   Debit                            Credit              

                              R's Current A/c           264

                                      To S's Current A/c                                  264

                                                                                                                                 

Interest calculation:

Interest on R's  drawing = 660

Profit to be shared in the ratio 3:2 = 396

= 264 to be credit in the account

Profit in the account of S = 264 debited in the account.

Interest on Drawing = 1000 * 12 * 5.5/12 *  12/100 =  Rs. 660