Question

After the accounts of a partnership have been drawn up and the books closed off, it is discovered that for

the years ending 31st March2016 and 2017, interest has been credited to the partners upon their capitals at 5%per

annum although, no provision for interest is made in the partnership agreement.

The amounts involved are- Interest Credited (Rs)

Year A B C

2016 4,200 2,400 1,320

2017 4,320 2,520 1,320

Prepare a statement showing how much each partner will ultimately gain or lose, according to above rate being

used. You are required to put through adjusting entry as on 1st April,2017, if profits were shared as follows in

2016, 2:2:1 and in 2017, 3:4:3.​

Answer 1

Answer:

 C's current A/c    Dr. 600

     To A's current A/c        400

     To B's current A/c        200

  (Being adjustment entry passed)

               Table showing Net Adjustments to be made Particulars A B C Adjustments in 2017 500 (200)(300)  Adjustments in 2018 (100) 400 (300) Net Adjustments 400 200 (600)    

                  Table showing adjustments to be made in 2017

 Particulars A B C Interest on capital(2500)  (2000) (1500) Profits  3000 1800 1200 Adjustments 500 (200) (300) 

 

           Table showing adjustments to be made in the year 2018

 Particulars A B C Interest on capital@5% (2500) (2000) (1500) Profits2400 2400 1200 Adjustments (100)400( 300)