Question

A, B and C were partners. Their fixed capitals were Rs. 60,000, Rs. 40,000 and

Rs. 20,000 respectively. Their profit' sharing ratio was 2 : 2 : 1. According to

the Partnership Deed, they were entitled to interest on capital @ 5% pa. In

addition, B was also entitled to draw a salary of Rs. 1,500 per month. C was

entitled to a commission of 5% on the profits after charging the interest on

capital, but before charging the salary payable to B. The net profits for the

year of Rs. 80,000, were distributed in the ratio of their capitals without

providing for any of the above adjustments. Showing your workings clearly, pass the necessary adjustment entries ​

Answer 1

Their fixed capitals were Rs 60,000, Rs 40,000 and Rs 20,000 respectively. Their profit-sharing ratio was 2 : 2 : 1. According to the Partnership Deed, they were entitled to interest on capital @ 5% p.a. In addition, B was also entitled to draw a salary of Rs 1,500 per month. ... A = 60000 x 5% = 3000