CBSE 2025, Set 3

Question

(b) A, B and C were partners in a firm. After the accounts of the partnership had been drawn up and the books closed off, it was discovered that the profit for the year ended 31st March, 2024 amounting to ₹ 6,00,000 had been distributed equally. The partnership deed provided for the following:
(i) Interest on capital was to be allowed @ 10% p.a.
(ii) A salary of ₹ 1,00,000 p.a. was to be allowed to A.
The capitals of A, B and C on 1st April, 2023 were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively.

Pass the necessary adjusting journal entry to rectify the above errors.

Edvaya · Accepted Answer

The correct answer is Subjective. **Statement Showing Adjustment** | Particulars | A (₹) | B (₹) | C (₹) | Total (₹) | |---|---|---|---|---| | (1) Profit wrongfully distributed equally, now reversed (Dr.) | 2,00,000 | 2,00,000 | 2,00,000 | 6,00,000 | | (2) Interest on Capital @ 10% (Cr.) | 40,000 | 30,000 | 20,000 | 90,000 | | (3) Salary to A (Cr.) | 1,00,000 | - | - | 1,00,000 | | (4) Remaining Correct Profit (6,00,000 - 1,90,000 = 4,10,000) distributed equally (Cr.)* | 1,36,667 | 1,36,667 | 1,36,666 | 4,10,000 | | **Total Correct Credit (2+3+4)** | **2,76,667** | **1,66,667** | **1,56,666** | **6,00,000** | | **Net Effect (Cr - Dr)** | **76,667 (Cr.)** | **33,333 (Dr.)** | **43,334 (Dr.)** | **NIL** | *(Note: Since profit sharing ratio is not given, it is assumed to be equal).* **Adjusting Journal Entry:** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | 2024 Mar 31 | B's Capital A/c ...Dr. C's Capital A/c ...Dr.     To A's Capital A/c (Adjustment of profit, interest on capital and salary) | | 33,333 43,334 | 76,667 |

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Accountancy > Accounting For Partnership Firms > Fundamentals Of Partnership

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