63. Profit earned by a partnership firm for the year ended 31st March, 2020 were distributed equally between the
partners-Pankaj and Anu-without charging interest on Drawings. Interest due on Drawings was Pankaj-
Compute the
3,000 and Anu- 1,000.
Pass necessary adjustment entry.
Answers
Answered by
2
Answer:
have your answer
Explanation:
As the profits were distributed between Pankaj and Anu without allowing interest on capital, we have to first reverse the profits that were distributed by passing the entry:-
Pankaj's Capital A/c Dr.
Anu's Capital A/c Dr.
To Profit and loss appropriation A/c.
(Being profit distributed earlier reversed)
Now we will pass the entry for allowing interest on capital to partners.
Profit and loss appropriation A/c Dr. 4,000
To Pankaj's Capital A/c 3,000
To Anu's Capital A/c 1,000
(Being interest on capital being credited to partner's capital a/c)
Similar questions