Question

a and b are partners in a firm sharing profit in the losses in the ratio of 6:4 their balance as on 31.03.2017 was as follows

Answer 1

Answer:

Rectification Entry is as follows:-

B's capital A/c Dr. 5280

To A's capital A/c 5280

(Being adjustment entry passed)

Calculation of Opening Capital

A B

Closing Capital 60,000 20,000

Add:Drawings 10,000 20,000

Less:Profits (18,000) (12,000)

Opening Capital 52,000 28,000

Interest on capital @12% 6240 3360

Table Showing Adjustments To be Made

Particulars A B

Interest on capital 6240 3360

Salary 12,000

Profit to be credited(30,000-12,000-6240-3360) 5040 3360

Less:wrongly credited profits (18,000) (12,000)

Net Effects 5280 (5280)