Question

Q.17. X & Y are partners in a firm sharing profits in the ratio of 3:2. Their respective capital contributions are
Rs.6,00,000 & Rs.3,00,000. Immediately after the allocation of Rs.80,000 as profits for the year ended 31"
March, 2009, it was discovered that in arriving at the profit for 2008 - 2009, he following items had ben
ignored:-
(i) Outstanding expenses of Rs.7,000
(ii) Accrued interest on investment of Rs.5,000
(iii) Unearned income of Rs.8,000.
Give journal entry

Answer 1

now now (I) out standing expenses 7000

now as these are outstanding they decrease the profit by 7000

(ii) as these are income which is recievable these increase profits5000

(iii)as unearned income increase profits but not really earned so they should be decreased

net effect is decrease in 10000

so entry

partners capital a/c Dr10000.

x-6000

y-4000

to profit and loss adjustment a/c. -. 10000