A, B and C are partners in a firm sharing profits and losses in the ratio of 2:3:5. Their fixed capitals were
15,00,000, 3000,000 and 60,00,000 respectively. For the year 2016 interest on capital was credited to
them @ 12% instead of 10%. Pass the necessary adjustment entry.
Answers
Answer:
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount
To Interest on capital
A= 50000*5%=2500
B=30000*5%=1500
C=20000*5%=1000 5000 By net profit 45000
To salary to
B= 5000
C=5000 10000
To profit T/f to
P's current A/c 15000
Q's current A/c 9000
R's current A/c 6000 30000
Total 45000 Total 45000
PARTNERS CAPITAL ACCOUNT
Particulars A B C Particulars A B C
To balance c/d 50000 30000 20000 By balance b/d 50000 30000 20000
Total 50000 30000 20000 Total 50000 30000 20000
PARTNERS CURRENT ACCOUNT
Particulars A B C Particulars A B C
To drawings
10000 7500 6000 By bal b/d 4500 1500 1000
By Interest on capital 2500 1500 1000
By bal c/d 12000 9500 7000 By Salaries 5000 5000
P/L Appropriation A/c 15000 9000 6000
Total 22000 17000 13000 22000 17000 13000
Explanation: