Question

A and B are partners sharing profit and losses in the ratio 3:2 having affixed capital of Rs.
3,00,000 and Rs.2,00,000 respectively. After closing the books of accounts it was found
that interest on capital was provided @6% p.a instead of 8% p.a. The amount of

adjustment entry will be :


(a) 2000
(b) 6000
(c) 4,000​

Answer 1

Answer:

Explanation:

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars  Amount  Particulars  Amount

To Int on capital

A=50000*6%

= 3000

B=30,000*6%

= 1800  4800  By net profit  50000

To Commission

A=300000*2%  6000    

To Salary

B=500*12  6000    

To Commission

B(notes)  1581    

To profits t/f to

A's Capital A/c= 23714

B's Capital A/c=7905  31619    

Total  50000  Total  50000

                               PARTNERS CAPITAL ACCOUNT

Particulars  A  B  Particulars A   B

To drawings  8000  6000  By bal b/d  50000  30000

     By Int on

capital 3000   1800

     By commission  6000  1581

To bal c/d  74714  35286  By P/L app A/c  23714  7905

Total  82714  41286  Total  82714  41286

           

Notes:- Commission to B= 5% of profits after all expenses including such commission

= 50,000-4800-6000-6000

= 33,200*5/105 = 1581.

Explanation: