T.S. Grewal Class 12 Chapter 1 Q.68 - Accounting for Partnership Firm Fundamentals

Question 68

Mohan, Vijay and Anil are partners, the balances of their Capital Accounts being ₹30,000, ₹25,000 and ₹20,000 respectively. In arriving at these amounts, profit for the year ended 31st March, 2025 of ₹24,000 had already been credited to the partners in the proportion in which they shared profits. Their drawings were ₹5,000 (Mohan), ₹4,000 (Vijay) and ₹3,000 (Anil) during the year. Subsequently, the following omissions were noticed and it was decided to rectify the errors: (a) Interest on capital @ 10% p.a.; (b) Interest on drawings: Mohan ₹250, Vijay ₹200 and Anil ₹150. Make the necessary corrections through a Journal entry and show your workings clearly.

Solution

JOURNAL

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2025 Mar 31	Anil’s Capital A/c    Dr.		550
	To Mohan’s Capital A/c			550
	(Interest on capital and on drawings omitted, now adjusted)

Statement Showing Adjustment (profit shared equally)

Particulars	Mohan	Vijay	Anil	Total
Interest on Capital @ 10% (opening 27,000 / 21,000 / 15,000)	2,700	2,100	1,500	6,300
Less: Interest on Drawings	(250)	(200)	(150)	(600)
Right Share	2,450	1,900	1,350	5,700
Less: Wrongly distributed as profit (1 : 1 : 1)	(1,900)	(1,900)	(1,900)	(5,700)
Net Effect	+550 (Cr.)	Nil	–550 (Dr.)	Nil

Opening capital = closing + drawings – profit share (₹8,000 each): Mohan ₹27,000; Vijay ₹21,000; Anil ₹15,000.