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Question
Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2: 3. The following was the balance sheet of the firm as on 31st March 2019.
Balance sheet of Puneet and Akshara as on 31st March 2019
| Liabilities |
Amount(₹) |
Assets |
Amount(₹) |
| Capitals: |
|
Sundry Assets |
2,00,000 |
|
Puneet - 90,000 |
|
|
|
|
Akshara - 1,10,000 |
2,00,000 |
|
|
|
|
2,00,000 |
2,00,000 |
The profits 40,000 for the year ended 31st March 2019 were divided between the partners without allowing interest on capital @ 5% p.a. and commission to Akshara @ ₹ 1,000 per quarter.
The drawings of the partners during the year were :
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.
Solution
In the books of Puneet and Akshara
Journal
| Date | Particulars | L.F. | Debit Amount (₹) |
Credit Amount (₹)
|
|
| 2019 Mar. 31 |
Puneet’s Capital A/c (WN1) | Dr. | 1,000 |
|
|
| To Akshara’s Capital A/c (Being interest on capital and commission not provided earlier, now rectified) |
1,000
|
||||
Working Notes:
1) Statement showing Adjustment
| Particulars | Puneet | Akshara | Firm | |||
| Dr. (₹) | Cr. (₹) | Dr. (₹) | Cr. (₹) | Dr. (₹) | Cr. (₹) | |
| Profits wrongly distributed |
16,000 | 24,000 | 40,000 | |||
| Interest on capital to be | 5,200 | 6,300 | 11,500 | |||
| provided (WN2) | ||||||
| Comission to partner (1,000 × 4) | 4,000 | 4,000 | ||||
| Right distribution of profits | 9,800 | 14,700 | 24,500 | |||
| Net Effect | 1,000 (Dr.) | 1,000 (Cr.) |
Nil | |||
2) Calculation of Opening Capital and interest on capital of the partners:
| Particulars | Puneet (₹) | Akshara (₹) |
| Capital of the partner as on 31st March, 2019 |
90,000 | 1,10,000 |
| Add: Drawings made by the partners | (2,500 × 12) 30,000 | (10,000 × 4) 40,000 |
| Less: Profits distributed during the year | 16,000 | 24,000 |
| Opening Capital of the partners |
1,04,000 |
1,26,000 |
| Interest on Capital @5% per annum |
5,200 |
6,300 |
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