Question

. Alok and Ashok are equal partners in a firm, their capital are 20,000 and 16,000 respe-
ctively. Ashok is entitled to get salary of 3 600 per month. Interest on capital is 6% per
annum. The profit of the firm before the above adjustment was 12,000. Prepare Profit
and Loss adjustment account. ​

Answer 1

I hope it helps sis sorry for the bad handwriting

Answer 2

Concept:

Profit and Loss Adjustment Account-

• Profit and loss adjustment accounts are created to record transactions, omissions, and errors that are discovered after the final accounts have been prepared and profits have been distributed among the partners.
• The omission could be for interest on capital, interest on drawings, interest on partners' loans, partner's salary, partner's commission, or unpaid expenses.

Given:

PSR= 1:1

Capitals-

Alok= 20000

Ashok= 16000

Salary to ashok = 3600 pm

IOC = 6%

Profit = 12000

Find:

Prepare Profit and Loss Adjustment Account

Solution:

                              Profit and Loss Adjustment Account

Particulars                 Amount                Particulars                     Amount

To Salary                    43200                 By Profit                            12000

To IOC                           2160                 By Partners Cap A/c

                                                                Alok                                  16680

                                                                Ashok                                16680

Hence, the partners will bear a loss of Rs. 16680 each.

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