[Ans.
Past Adjustments/Adjustments in Closed Accounts
35. X, Y and Z are partners sharing profits and losses in the ratio of
3:2:1. After the final accounts had been prepared, it was discovered
that interest on drawings @ 5% p.a. had not been taken into
consideration. The drawing of partners were: X-15,000, Y-12,600
and Z - 12,000.
Give the necessary adjusting journal entry.
(C.B.S.E., Sample Paper II 2008)
[Hint. Interest on drawing be charged for 6 months on an average basis.]
Answers
Explanation:
ANSWER
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount
To Int on capital
A=50000*6%
= 3000
B=30,000*6%
= 1800 4800 By net profit 50000
To Commission
A=300000*2% 6000
To Salary
B=500*12 6000
To Commission
B(notes) 1581
To profits t/f to
A's Capital A/c= 23714
B's Capital A/c=7905 31619
Total 50000 Total 50000
PARTNERS CAPITAL ACCOUNT
Particulars A B Particulars A B
To drawings 8000 6000 By bal b/d 50000 30000
By Int on
capital 3000 1800
By commission 6000 1581
To bal c/d 74714 35286 By P/L app A/c 23714 7905
Total 82714 41286 Total 82714 41286
Notes:- Commission to B= 5% of profits after all expenses including such commission
= 50,000-4800-6000-6000
= 33,200*5/105 = 1581.