Question

A and B were partners sharing profits in 2: 1 ratio. During the year ended 31st March, 2020, A’s drawings were

20,000 per month drawn at the beginning of every month and B’s drawings were 10,000 per month drawn at the

end of every month. After the preparation of final accounts, it was discovered that interest on A’s drawings@ 12%

p.a. was not taken into consideration. Give the necessary adjusting entry.​

Answer 1

ADJUSTING ENTRY

Explanation:

Since A withdrew 20,000 per month, so:

Total Drawing at the end of the year 31st March 2020 is:-

20,000 X 12 Months = Rs. 2,40,000

Interest on Drawing;-

On 2,40,000 @ 12%

= 2,40,000 X 12/100

= 28,800

REFER TO THE ATTACHMENT FOR THE ADJUSTING ENTRY.