Question

Asha, Nisha and Hiten were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their fixed capitals were ₹ 2,00,000, ₹ 1,50,000 and ₹ 1,00,000 respectively. The partnership deed provided for interest on capital @ 10% p.a. For the year ended 31^st March, 2023, profits of the firm were distributed without providing interest on capital. Pass the necessary adjusting Journal entry to rectify the error. 

Answer 1

Journal entries
Date	Particulars	Amount (₹)	Amount (₹)
	Nisha's Current A/c   ...Dr.	3,000
	To Asha's Current A/c		2,000
	To Hiten's Current A/c		1,000
	(Being error rectified)

Adjustment Table:

Particulars	Asha	Nisha	Hiten	Firm
Interest on capital @ 10% p.a	20,000 (Cr.)	15,000 (Cr.)	10,000 (Cr.)	45,000 (Dr.)
Profit already distributed	18,000 (Dr.)	18,000 (Dr.)	9,000 (Dr.)	45,000 (Cr.)
Difference	2,000 (Cr.)	3,000 (Dr.)	1,000 (Cr.)	0