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Question 69 Chapter 2 of +2-A
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69. Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. The following
information is of the firm as on 31st March 2019:
| Liabilities | Rs | Assets | Rs | ||
| Mannu’s Capital | 30,000 | Drawings: | |||
| Shristhi’s Capital | 10,000 | 40,000 | Mannu | 4,000 | |
| Shristhi | 2,000 | 6,000 | |||
| Sundry Assets | 34,000 | ||||
| 40,000 | 40,000 |
Profit for the year ended 31st March 2019 was 5,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently omitted.
Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.
The solution of Question 69 Chapter 2 of +2-A:
| Date | Particulars | L.F. | Debit | Credit | |
| Shrishti’s Capital A/c | Dr | 288 | |||
| To Mannu’s Capital A/c | 288 | ||||
| (Being adjustment made) | |||||
Working Note: –
| Statement Showing Adjustment of Profit required | |||
| Particulars | Mannu | Shristhi | Total |
| Actual Amount of Interest on Capital @5% p.a. *2 | 1,500 | 500 | 2,000 |
| Less: – Interest on Drawing *3 | 120 | 60 | 180 |
| Actual Amount to be credited | 1,380 | 440 | 1,820 |
| Less: wrongly Amount credited in Profit sharing ratio i.e. 3:2 | 1,092 | 728 | 1,820 |
| 288 | -288 | – | |
Mannu get less amount, so we have to credited his capital a/c with difference amount | Shristhi get extra so we have to debit his capital a/c with difference amount
| ||
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*1 Calculation of Actual Amount of Interest on A’s, B’s, & C’s Capital
Interest on Capital = Opening Capital X Rate of Interest
| Interest on Mannu’s Capital | = | 30,000 | X | 5 |
| 100 |
Interest on Mannu’s Capital = 1,500/-
| Interest on Shristhi’s Capital | = | 10,000 | X | 5 |
| 100 |
Interest on Shristhi’s Capital = 500/-
*3 Calculation of Interest on Mannu’s & Shristhi’s Drawing
| Interest on Drawing | = | Drawing X Rate of Interest X Period |
| Period | = | During the year |
| = | 6 Months |
| Interest on Mannu’s Drawing | = | 4,000 | X | 6 | X | 6 |
| 100 | 12 |
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Interest on Mannu’s Drawing = 120/-
| Interest on Shristhi’s Drawing | = | 2,000 | X | 6 | X | 6 |
| 100 | 12 |
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Interest on Shristhi’s Drawing = 60/-
Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
