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Ajay, Binay and Chetan were partners sharing profits in the ratio of 3 : 3 : 2. The Partnership Deed provided for: (i) a salary of ₹2,000 per quarter to Ajay and Binay; (ii) Chetan was entitled to a commission of ₹8,000; (iii) Binay was guaranteed a profit of ₹50,000 p.a. The profit of the firm for the year ended 31st March, 2015 was ₹1,50,000, which was distributed among Ajay, Binay and Chetan in the ratio of 2 : 2 : 1 without taking into consideration the provisions of the Partnership Deed. Pass the necessary rectifying entry. Show your workings clearly. (Delhi 2016)
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Ajay’s Capital A/c Dr. | 6,400 | |||
| Binay’s Capital A/c Dr. | 2,000 | |||
| To Chetan’s Capital A/c | 8,400 | |||
| (Rectification of omitted salary, commission and guarantee) |
Statement Showing Adjustment
| Particulars | Ajay | Binay | Chetan | Total |
|---|---|---|---|---|
| Salary / Commission | 8,000 | 8,000 | 8,000 | 24,000 |
| Share of correct profit (after guarantee) | 45,600 | 50,000 | 30,400 | 1,26,000 |
| Right Share | 53,600 | 58,000 | 38,400 | 1,50,000 |
| Less: Wrongly distributed (2 : 2 : 1) | (60,000) | (60,000) | (30,000) | (1,50,000) |
| Net Effect | –6,400 (Dr.) | –2,000 (Dr.) | +8,400 (Cr.) | Nil |
Working Note: Salary: Ajay & Binay ₹8,000 each (₹2,000 × 4). Divisible profit = ₹1,50,000 – ₹16,000 – ₹8,000 = ₹1,26,000 (3 : 3 : 2 → ₹47,250 / ₹47,250 / ₹31,500). Binay’s deficiency ₹2,750 is borne by Ajay and Chetan in 3 : 2 (₹1,650 / ₹1,100).
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.88 - 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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