Question

Priya and Ruchi were partners in a firm sharing profits in the ratio of 7:5. Their respective fixed capitals
were Priya Rs 20,00,000 and Ruchi Rs 14,00,000. The partnership deed provided for the following:
(i) Interest on capital- @12% p.a.
(ii) Priya’s salary Rs 12,000 per month and Ruchi’s salary Rs 1,20,000 per year. The profit for the year
ended 31st December,2012 was Rs 10,08,000 which was distributed equally, without providing for the
above. Pass an adjustment entry

Answer 1

Answer:

Net profit a/c. dr 10,08,000

to profit and loss appropriation a/c 10,08,000

IOC a/c. dr 408000

to profit and loss appropriation a/c 408000

Salary a/c dr 264000

to profit and loss appropriation a/c 264000

Profit and loss appropriation a/c. dr 336000

to priya a/c 196000

to ruchi a/c 140000

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