RAM, SAYAM, AND MOHAN ARE PARTNERS IN FIRM SHARING PROFIT AND LOSSES IN THE RATIO OF 2:1:2 THE FIXED CAPITAL WAS RS 300000 , 100000 , 200000 RESPECTLIVELY INTEREST ON CAPITAL FOR YEAR ENDING 31 MARCH 2011 WAS CREDITED TO THEM @ 9%P.A INSTED OF 10% P.A THE PROFIT OF THE YEAR BEFORE CHARGING INTESREST WAS RS 250000 PREPARE NECEDSARY ADJUSTMENT ENTRY
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Answer:
Table showing adjustment
Ram. Shyam. Mohan. total
Interest on
capital @1%
less credited 3000. 1000. 2000. 6000
Division of loss
in ratio of 2:1:2
(debit). 2400. 1200. 2400. 6000
difference. 600. 200. 400
(cr). (dr,). (dr,)
Adjustment entry
Shyam current account dr 200
Mohan current account. dr 400
To Ram current account. 600
Explanation:
Interest on capital provided to partners @ 1%less
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