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Question 70 Chapter 2 of Class 12 Part - 1
70. Partners X, Y and Z have omitted interest on capitals for three years ended 31st March, 2017. Their fixed capitals on which interest is based throughout were: X Rs. 1,00,000; Y Rs. 60,000, and Z Rs. 40,000. Interest is to be allowed at 5% per annum. Their profit sharing ratios were: 2013-14-1:2:2; 2014-15-3:1:1; 2015-16-4:5:1. Give the ne adjustment entry.
| Total Interest for 3 years | Rs. |
| On X’s Capital | 15,000 |
| On Y’s Capital | 9,000 |
| On Z’s Capital | 6,000 |
| 30,000 |
Total Interest for a year = 5,000 (X) + 3,000(Y) + 2,000(Z) = Rs. 10,000
Table Adjustment
| Particulars |
X Rs. |
Y Rs. |
Z Rs. | Total Rs. |
|---|---|---|---|---|
| Total Interest on Capitals payable @5% p.a for 3 years (Cr.) (A) | 15,000 | 9,000 | 6,000 | 30,000 |
| Profit already distributed: | ||||
| 2013-14 – Rs. 10,000 in 1:2:2 | 2,000 | 4,000 | 4,000 | 10,000 |
| 2014-15 – Rs. 10,000 in 3:1:1 | 6,000 | 2,000 | 2,000 | 10,000 |
| 2015-16 – Rs. 10,000 in 4:5:1 | 4,000 | 5,000 | 1,000 | 10,000 |
| (B) | 12,000 | 11,000 | 7,000 | 30,000 |
| Net Effect (A-B) | 3,000(Cr.) | 2,000 (Dr.) | 1,000 (Dr.) | NIL |
Adjustment Journal Entry
| Date | Particular | L . F |
Dr. ₹ | Cr. ₹ | |
|---|---|---|---|---|---|
| Y’s Current A/c | Dr. | 2,000 | |||
| Z’s Current A/c | Dr. | 1,000 | |||
| To X’s Current A/c | 3,000 | ||||
| (Being partners’ current account adjusted for interest on capital) |
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Also, Check out the solved question of all Chapters: -
Chapter No. 1 - Accounting Not for Profit Organisations
Chapter No. 2 - Partnership Accounts - I (Introduction)
Chapter No. 3 - Partnership Accounts - II (Goodwill: Nature and Valuation)
Chapter No. 4 - Partnership Accounts - III (Reconstitution of Partnership)
Chapter No. 5 - Partnership Accounts - IV (Admission of A Partner)
Chapter No. 6 - Partnership Accounts - V (Retirement and Death of A Partner)
Chapter No. 7 - Partnership Accounts - VI (Dissolution of Partnership Firm)
Chapter No. 8 - Company Accounts (Share Capital)
Chapter No. 9 - Company Accounts (Issue of Debentures)
Chapter No. 10 - Company Accounts (Redemption of Debentures)
Chapter No. 1 - Financial Statements of a Company
Chapter No. 2 - Financial Statement Analysis
Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 4 - Ratio Analysis
Chapter No. 5 - Cash Flow Statement
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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