Question 70 Chapter 2 of Class 12 Part - 1 VK Publication

Question 70 Chapter 2 of Class 12 Part – 1

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The solution of Question 70 Chapter 2 of Class 12 Part – 1: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

70. Partners X, Y and Z have omitted interest on capitals for three years ended 31st March, 2017. Their fixed capitals on which interest is based throughout were: X Rs. 1,00,000; Y Rs. 60,000, and Z Rs. 40,000. Interest is to be allowed at 5% per annum. Their profit sharing ratios were: 2013-14-1:2:2; 2014-15-3:1:1; 2015-16-4:5:1. Give the ne adjustment entry.

The solution of Question 70 Chapter 2 of Class 12 Part – 1: –

Total Interest for 3 years	Rs.
On X’s Capital	15,000
On Y’s Capital	9,000
On Z’s Capital	6,000
	30,000

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Total Interest for a year = 5,000 (X) + 3,000(Y) + 2,000(Z) = Rs. 10,000

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Table Adjustment

Particulars	X Rs.	Y Rs.	Z Rs.	Total Rs.
Total Interest on Capitals payable @5% p.a for 3 years (Cr.) (A)	15,000	9,000	6,000	30,000
Profit already distributed:
2013-14 – Rs. 10,000 in 1:2:2	2,000	4,000	4,000	10,000
2014-15 – Rs. 10,000 in 3:1:1	6,000	2,000	2,000	10,000
2015-16 – Rs. 10,000 in 4:5:1	4,000	5,000	1,000	10,000
(B)	12,000	11,000	7,000	30,000
Net Effect (A-B)	3,000(Cr.)	2,000 (Dr.)	1,000 (Dr.)	NIL

Adjustment Journal Entry

Date	Particular		L . F	Dr. ₹	Cr. ₹
	Y’s Current A/c	Dr.		2,000
	Z’s Current A/c	Dr.		1,000
	To X’s Current A/c				3,000
	(Being partners’ current account adjusted for interest on capital)