Question

Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3. Their Capital Accounts as on 1st April, 2015 showed balances of ₹ 1,40,000 and ₹ 1,20,000 respectively. The drawings of mita and Usha during the year 2015-16 were ₹ 32,000 and ₹ 24,000 respectively. Both the amounts were withdrawn on 1st January 2016. It was subsequently found that the following items had been omitted while preparing the final accounts for the year ended 31st March, 2016:
(a) Interest on Capital @ 6% p.a.
(b) Interest on Drawings @ 6% p.a.
(c) Mita was entitled to a commission of ₹ 8,000 for the whole year.
Showing your working clearly, pass a rectifying entry in the books of the firm.

Answer 1

The journal entry and the adjustment statement are given below

Explanation:

Given,

Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3.

Their Capital Accounts are ₹ 1,40,000 and ₹ 1,20,000 respectively

The drawings of mita and Usha were ₹ 32,000 and ₹ 24,000 respectively.

Calculation of Interest on Capital @ 6% p.a.

Interest on Mita's Capital

$=1,40,000 \times \frac{6}{100}=8,400$

Interest on Usha's Capital

$=1,20,000 \times \frac{6}{100}=7,200$

Calculation of Interest on Drawing 6% ( 1 Jan 2016 )

Interest on Mita's Drawing

$=32,000 \times \frac{6}{100} \times \frac{3}{12}=480$

Interest on Usha's Drawing

$=24,000 \times \frac{6}{100} \times \frac{3}{12}=360$

As per the journal given below, an amount of Rs. 6816 has been Debited from Usha's Capital and has been Credited to Mita's Capital.

Answer 2

Explanation:

The journal entry and the adjustment statement are given below

Explanation:

Given,

Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3.

Their Capital Accounts are ₹ 1,40,000 and ₹ 1,20,000 respectively

The drawings of mita and Usha were ₹ 32,000 and ₹ 24,000 respectively.

Calculation of Interest on Capital @ 6% p.a.

Interest on Mita's Capital

=1,40,000 \times \frac{6}{100}=8,400=1,40,000×

100

6

=8,400

Interest on Usha's Capital

=1,20,000 \times \frac{6}{100}=7,200=1,20,000×

100

6

=7,200

Calculation of Interest on Drawing 6% ( 1 Jan 2016 )

Interest on Mita's Drawing

=32,000 \times \frac{6}{100} \times \frac{3}{12}=480=32,000×

100

6

×

12

3

=480

Interest on Usha's Drawing

=24,000 \times \frac{6}{100} \times \frac{3}{12}=360=24,000×

100

6

×

12

3

=360

As per the journal given below, an amount of Rs. 6816 has been Debited from Usha's Capital and has been Credited to Mita's Capital.