69 Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March, 2017 and 2018, although there is no provision for interest on capital in the Partnership Deed. On the other hand, Naveen and Qadir were entitled to a salary of Rs 3,500 and Rs 4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were Rs 4,00,000, Rs 3,60,000 and Rs 2,40,000 respectively. During the last two years they had shared the profits and losses as follows:
Year Ended Ratio
31st March, 2017 3 : 2 : 1
31st March, 2018 5 : 3 : 2
Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018. Show your workings clearly.
Sol-
Table of Showing Adjustment
Particular Navin Qadir Rajesh
Dr Cr Dr Cr Dr Cr
Interest on capital 24000 21600 14400
Salary N
Q 3500 x 4
4000 X 4 14000 16000
Excess 3:2:1 X 30,000 15000 10000 5000
Interest on capital 24000 21600 14400
Salary N
Q 3500 x 4
4000 X 4 14000 16000
Excess 5:3:2 X 30,000 15000 9000 6000
Total 48000 58000 43200 51000 28800 11000
10000 7800 17800
Answers
Answer:
Explanation:
Final Adjustment
Particulars Naveen Qadir Rajesh
Dr. Cr. Dr. Cr. Dr. Cr.
Interest on capital 24000 21600 14400
Salary 14000 16000
Excess Dr. 3:2:1 15000 10000 5000
Interest on capital 24000 21600 14400
Salary 14000 16000
Excess dr. 5:3:2 15000 9000 6000
Total 48000 58000 43200 51000 28800 11000
10000(cr) 7800(cr) 17800(dr)