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Anand, Ridhi and Shyam were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their fixed capitals were ₹1,00,000, ₹60,000 and ₹40,000 respectively. For the year ended 31st March, 2023, interest on capital was credited to their capital accounts @ 9% p.a. instead of 7% p.a. Pass the necessary adjusting Journal entry. (CBSE 2024)
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Anand’s Current A/c Dr. | 400 | |||
| To Ridhi’s Current A/c | 400 | |||
| (Excess interest on capital @ 2% wrongly credited, now adjusted) |
Adjustment Table (excess interest = 2% i.e. 9% – 7%)
| Particulars | Anand | Ridhi | Shyam | Total |
|---|---|---|---|---|
| Excess interest credited @ 2% (reversed) | (2,000) | (1,200) | (800) | (4,000) |
| ₹4,000 redistributed as profit (2 : 2 : 1) | 1,600 | 1,600 | 800 | 4,000 |
| Net Effect | –400 (Dr.) | +400 (Cr.) | Nil | 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.84 - 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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