P,Q,R are partners in a firm. Their Capital accounts stood at ₹90000,₹45000,₹45000 respectively on 31st March ,2019. 1. R was to be allowed remuneration of ₹9000 p.a. 2. interest at 5% p.a. was to be provided on capital. 3. Profit were to be divided in the ratio of 2:2:1. Ignoring the above items , net profit of ₹54000 for the year ended 31.3.2019. It was divided among the partners equally . Make journal entry for rectification and show workings.
Answers
Answer:
Table showing adjustment
P. Q. R. total
profits already
distributed
54000/3. 18000. 18000. 18000. 54000
(dr.)
profit should
distribute
as follow
R's salary 9000. 9000
interest
on capital. 4500. 2250. 2250. 9000
divisible
profit of 36000
divided in
2:2:1. 14400. 14400. 7200. 36000
amount payable
cr. 18900. 16650. 18450. 54000
difference. 900. 1350. 450
cr. dr. cr
Rectify entry
Q's capital account. dr 1350
To P 's capital account. 900
To R ' s capital account. 450
Explanation:
profits of 54000 divided equally is wrong distribution so we debited it
Right distribution of profits is credited to partners ( R salary 9000 and interest o. capital is 9000 after subtracting both items from 54000 then remaining divisible profits 36000 distributed among partners in 2:2:1)