Question

Note : Since the capitals are
131. After the accounts of a partnership have been drawn up and the books
closed off, it is discovered that for the years ended 31st March, 2016 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
Year
A
B. C
₹
₹
2016
4,200 2,400 1,320
2017
4,320 2,520 1,320
You are required to put through adjusting entry as on 1st April, 2017, if the profits
were shared as follows in 2016, 2:2:1 and in 2017, 3: 4:3.​

Answer 1

Answer:

Explanation:

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)

Profits                                        2400  2400  1200

Adjustments                                 (100) 400           ( 300)