90. The partners of a firm, Alia, Bhanu and Chand distributed the profits for the year ended 31st March, 2017,
780,000 in the ratio of 3:3:2 without providing for the following adjustments:
a) Alia and Chand were entitled to a salary of 1.500 each per month.
(b) Bhanu was entitled for a commission of 4000.
(c) Bhanu and Chand had guaranteed a minimum profit of 3 35,000 pa to Alia any deficiency to bome
equally by Bhanu and Chand.
Pass the necessary Journal entry for the above adjustments in the books of the firm Show workings clearly.
(CBSE Sample Paper 2018)
Answers
Answer:
S.NO PARTICULARS L.F DEBIT CREDIT
1. Alia capital A/C DR
Bhanu capital A/C DR
Chand capital A/C DR
To Profit and loss adjustment A/C
(Being share of profit wrongly credited to partner capital A/C) 30,000
30,000
20,000
80,000
2. Profit and aloss adjustment A/C DR
To alia capital A/C
To bhanu capital A/C
To chand capital A/C
(Being salary credited to partners capital A/C) 84,000
18,000
48,000
18,000
3. alia capital A/C DR
Bhanu capital A/C DR
Chand capital A/C DR
To profit and loss adjustment A/C
(Being loss on adjustment transferred to capital A/C) 1,500
1,500
1,000
4,000WORKING NOTE:
ADJUSTMENT TABLE
PARTICULARS ALIA BHANU CHAND FIRM
amount to be debited:
wrong profit without adjustments: (30,000) (30,000) (20,000) (80,000)
Amount to be credited:
salary to partners 18,000 48,000 18,000 84,000
Amount to be debited in capital A/C
loss incurred after adjustments (1,500) 1,500) (1,000) (4,000)
13,500
(debit) 16,500
(credit) 3,000
(debit) ADJUSTMENT ENTRY:
Alia capital A/C DR 13,500
Chand capital A/C DR 3,000
To bhanu capital A/C 16,500
Regards
Answer:
S.No PARTICULAR SL.FDEBIT CREDIT
1.Alia capital A/C DR
Bhanu capital A/C DR
Chand capital A/C DR
To profit and loss adjustment A/C
(Being share of profit wrongly credited to partner capital A/C)
30,000
30,000
20,000
80,000
2.profit and loss adjustment A/C DR
To alia capital A/C
To bhanu capital A/C
To chand capital A/C
(Being salary credited to partners capital A/C). 84,000
18,000
48,000
18,000
3.Alia capital A/C DR
Bhanu capital A/C DR
Chand capital A/C DR
To profit and loss adjustment A/C
(Being loss on adjustment transferred to capital A/C). 1,500
1,500
1,000
4,000 WORKING NOTE:
ADJUSTMENT TABLE
PARTICULARS ALIA BHANU CHAND FIRM
amount to be debited:
wrong profit without adjustments:
(30,000)30,000)(20,000)(80,000)
Amount to be credited:
Salary to partners 18,000 48,000 18,000 84,000
Amount to be debited in capital A/C
loss incurred after adjustments (1,500)1,500) (1,000)(4,000)
13,500
(debit)16,500
(credit)3,000
(debit) ADJUSTMENT ENTRY:
Alia capital A/C. DR
13,500
chand capital A/C. DR
3,000
To bhanu capital A/C
16,500
Regards