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.

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 :

i) Interest on Capital @ 5% p.a.

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

iii) 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.

Past Adjustment

Particulars	X	Y	Z
Amount wrongly Credited A	36,000	12,000	12,000
Amount to be credited
Interest on Capital @5%	5,000	4,000	3,000
Interest on Drawings	(700)	(500)	(300)
Salary	1,000	1,500
Profit share in 3:1:1	28,200	9,400	9,400
B	33,500	14,400	12,100
Difference (B-A)	(2,500)	2,400	100
	Dr.	Cr.	Cr.

Journal Entries

Date	Particulars		L.F.	Amount	Amount
	X’s current A/c	Dr.		2,500
	To Y’s current A/c				2,400
	To z’s current A/c				100
	(Being profit adjust among the partners)

Chapter-2 Partnership Basic: Accounts

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