Question

X, Y and Z were partners in a firm. Their capitals were Rs.1,00,000;
Rs.2,00,000 and Rs.2,50,000. Their agreement provided the following:
(a) The profit sharing ratio will be 1:2:2
(b)X is being guaranteed a share of Profit Rs.50,000
(c) Y will be allowed a salary of Rs.12,000 p.a.
(d) Interest on capital will be allowed @ 12% p.a.
The interest on drawings were Rs.500, Rs.600, and Rs. 800 for X,Y and Z. The
firm earned a profit of Rs. 2,88,900 during the year.​

Answer 1

Explanation:

The net profit of X, Y and Z for the year ended March 31, 2016 was Rs. 60.000

and the same was distributed among them in their agreed ratio of 3:1:1. It was

subsequently discovered that the under mentioned transactions were not recorded

in the books

(1) Interest on Capital @ 5% p.a.

(11) Interest on drawings amounting to X Rs. 700, Y Rs. 500 and Z Rs. 300

(in) Partner's Salary: X Rs. 1000, Y Rs. 1500 p.a.

The capital accounts of partners were fixed as : X Rs. 1,00,000, Y Rs.

80,000 and Z Rs. 60,000. Record the adjustment entry.