Mannu and Shristhi are Partners in a Firm Sharing Profit in the Ratio of 3 : 2. Following is the Balance Sheet of the Firm As on March 31, 2017

By admin -
Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following is the balance sheet of the firm as on March 31, 2017.

LiabilitiesAmount (Rs)AssetsAmount (Rs)
Mannu’s Capital30,000Drawings :
Shristhi’s Capital10,000  40,000Mannu4,000
  Shristhi2,0006,000
Other Assets34,000
 40,000 40,000

Profit for the year ended March 31, 2017 was Rs 5,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently enquioired. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.



Adjustment of Profit

 Mannu’sShrishtiTotal
Interest on Capital1,5005002,000
Less: Interest on Drawings(120)(60)(180)
Right distribution of Rs 1,8201,3804401,820
Less: Wrong distribution of Rs 1,820 (3 : 2)(1,092)(728)(1,820)
Adjusted Profit288(288)NIL

Adjusting Journal Entry

Date Particulars L.FDebit Amount RsCredit Amount Rs
 Shrishti’s Capital A/cDr. 288
 To Mannu’s Capital A/c  288 
 (Adjustment of profit made)   
     

Chapter-2 Partnership Basic: Accounts



Comments

Post a Comment

Popular posts from this blog

Who do you think is the ‘well-dressed customer’ at the shop?

By admin -
Read the following passage. At the shop there was a well-dressed customer. He bent down and asked the little girl, “What kind of a miracle does your brother need? “I don’t know,” she replied with her eyes welling up. “He’s really sick and Mummy says he needs an operation. But my Daddy can’t pay for it, so I have brought my savings.” “How much do you have?” asked the man. “One dollar and eleven cents, but I can try and get some more,” she answered barely audible. Answer the following questions. 1) Who do you think is the ‘well-dressed customer’ at the shop? 2) What did the well-dressed man ask the little girl? 3) “He’s really sick.” Who does title word ‘he’ refer to here ? What is he to Tess? 4) What did he need urgently? 5) How much money did the little girl have with her? SOLUTION 1. I think the well-dressed customer at the shop is Dr. Carlton Armstrong. 2. The well-dressed man asked the little girl what kind of a miracle her brother needed. 3. The word ‘he’ refers to A...
Read more

What Journal Entries Will be Made In the Following Cases When Company Redeems Debentures At the Expiry of Period By Serving the Notice-Solution

By admin -
What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice:  (a) when debentures were issued at par with a condition to redeem them at premium;  (b) when debentures were issued at premium with a condition to redeem that at par; and  (c) when debentures were issued at discount with a condition to redeem them at premium? SOLUTION Journal entries S.No. Particulars L.F. Amount (Rs.) Amount (Rs.) (a) Debenture A/c Dr.   Premium on Redemption of Debenture A/c Dr.      To Debenture Holders A/c   (Amount due for  redemption of Debentures)   Debenture Holders A/c Dr.      To Bank A/c   (Payment made to Debenture Holders) (b) Debenture A/c Dr.      To Debenture Holders A/c   (Amount due for redemption of debentures that were issued at premium with term of redeemable at par)   Debenture Holders A/c Dr.      To Bank...
Read more

Describe how accounts are used to record information about the effects of transactions? - Bzziii

By admin -
Describe how accounts are used to record information about the effects of transactions? SOLUTION Every transaction is recorded in the original book of entry (journal) in order of their occurrence; however, if we want to know that how much we receive from our debtors or how much to pay to the creditors, it is not possible to determine at a single movement. Hence, we prepare accounts to know the position of business activities in the meantime. There are some steps to record transactions in accounts: Step 1: Locate the account in ledger, Step 2: Enter the date of transaction in the date column of the debit side of Account. Step 3: In the ‘Particulars’ column of the debit side of Account, the name of corresponding account is to be written Step 4: Enter the page number of the ledger in the Journal Folio (J.F.) column of Account. Step 5: Enter the amount in the ‘Amount’ column. Step 6: Same steps are to be followed to post entries in the credit side of Account. Step 7: Afte...
Read more