Question

Mona nisha and priyanka are partners in a firm. They contributed 100000 each as capital three years ago. At that time priyanka agreed to look after the business as mona and nisha were busy. The profits for the last three years 15000 15000 and 60000 respectively. While going through the books of accounts mona noticed that the profit had been distributed in the ratio of 1:1:2. When she inquired from priyanka she said that she looked after the books therefore she should get more profit. Mona disagreed and it was decided to distribute the profit equally for the last three years. You are required to make necessary corrections in the books of accounts of mona nisha and priyanka by passing an adjustment entry.

Answer 1

Answer:

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Explanation:

(ii) Value not practised by Priyanka while distributing profits is (Anyone)

(a)   Honesty Priyanka has not shown honesty towards co-partners by not distributing profits as per the provision of the Partnership Act.

(b)   Transparency Priyanka has not shown transparency while distributing profits as per her wish and not communicating the same to other partners.

(c)   Equity Priyanka has not shown equity in profit distribution.

(d)  Teamwork Priyanka has not shown teamwork by hiding the profit-sharing ratio from other partners