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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
On 31st March, 2025, after the closing of the accounts, the Capital Accounts of P, Q and R stood in the books of the firm at ₹40,000, ₹30,000 and ₹20,000 respectively. Subsequently, it was noticed that interest on capital @ 5% had been omitted. Profit for the year ended 31st March, 2025 was ₹60,000 and the partners’ drawings had been P ₹10,000, Q ₹7,500 and R ₹4,500. The profit-sharing ratio of P, Q and R is 3 : 2 : 1. Give the necessary adjustment entry.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2025 Mar 31 | P’s Capital A/c Dr. | 300 | ||
| To Q’s Capital A/c | 8 | |||
| To R’s Capital A/c | 292 | |||
| (Interest on capital omitted, now adjusted) |
Calculation of Opening Capital
| Particulars | P (₹) | Q (₹) | R (₹) |
|---|---|---|---|
| Closing Capital | 40,000 | 30,000 | 20,000 |
| Add: Drawings | 10,000 | 7,500 | 4,500 |
| Less: Profit (3 : 2 : 1 of 60,000) | (30,000) | (20,000) | (10,000) |
| Opening Capital | 20,000 | 17,500 | 14,500 |
Statement Showing Adjustment
| Particulars | P | Q | R | Total |
|---|---|---|---|---|
| Interest on Capital @ 5% (to be credited) | 1,000 | 875 | 725 | 2,600 |
| Less: ₹2,600 borne as reduction of profit (3 : 2 : 1) | (1,300) | (867) | (433) | (2,600) |
| Net Effect | –300 (Dr.) | +8 (Cr.) | +292 (Cr.) | Nil |
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.
This guide covers "T.S. Grewal Class 12 Chapter 1 Q.67 - Accounting for Partnership Firm Fundamentals", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Accounting for Partnership Firm – Fundamentals.
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