4. P, Q, R are partners sharing profits and losses in the ratio of 5: 3:2. The partnership deed provides for charging interest on drawings @ 10% p.a. The drawings of P, Q and R during the year ending 31st March, 2021 amounted to *20,000, 15,000 and 10,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Give necessary adjusting journal entry. (1)
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Explanation:
interest on drawing
p=20000×10/100=2000
q=15000×10/100=1500
r=10000×10/100=1000
undistributed profit of firm =2000+1500+1000=4500
share of profit
p=4500×5/10=2250
q=4500×3/10=1350
r=4500×2/10=900
so,
Q's capital a/c dr. 150
R's capital a/c dr 100
to P's capita a/c 250
(adjustment for intrest on drawing)
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