Question

The capital of A& B WERE 400000; and 200000 divided profit in capital ratio.Profit 300000 distributed without the following;-IOC @12%;IOD 12000 & 10000 ;Commission to B 20000; Salary of A 50000.Pass an adjustment entry. 

please help ​

Answer 1

Answer:

details A B firm

profit

taken (2,00,000) (1, 00,000) 3,00,000

IOC 48,000 24,000 (72,000) commission 20,000 (20,000)

salary 50,000 (50,000)

IOD (12,000) (10,000) 22,000

profit/loss 90,000 90,000 (1,80,000)

net effect (24,000) 24,000 nil

A's capital account.... Dr 24,000

to B's capital account 24,000

assumptions:-

- it is assumed that capital are fixed

- it is assumed that partnership deed is there but profit s to be shared equally