Ownclasses

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. The following was the Balance Sheet of the firm as on 31-3-2010. 

Liabilities

Amount Rs

Assets

Amount Rs

 

Capital        A

 

                  B

 

60,000

 

20,000

 

Sundry Assets

 

80,000

 

80,000

 

80,000

The profits Rs. 30,000 for the year ended 31-3-2010 were divided between the partners without allowing interest on capital @ 12% p.a. and salary to A @ Rs. 1,000 per month. During the year A withdrew Rs. 10,000 and B Rs. 20,000. Pass the necessary adjustment journal entry and show your working clearly.

Answer

Date

Particulars

LF

Debit (Rs)

Credit (Rs)

 

 

B’s capital a/c                                    Dr

 

                  To a’s capital a/c

 

(being interest on capital and salary unpaid adjusted.)

 

 

 

 

5280

 

 

 

5280

 

Working Notes

Calculation of opening Capital

PARTICULARS

A

B

 

Capital closing balance

Less profit

 

 

Add drawings

 

Capital opening balance

 

 

60,000

18,000

 

 

20,000

12,000

 

42,000

10,000

8,000

20,000

52,000

28,000

 

Calculation of Net amount to be adjusted:                          

Particulars

Partner A’s a/c

Partner B’s a/c

Firm a/c

Dr

Cr

Dr

Cr

Dr

Cr

Interest on capital

 

6,240

 

3,360

9,600

 

Salary to A

 

12,000

 

 

12,000

 

 

12,960

 

8,640

 

 

21,600

Total

12,960

18,240

8,640

3,360

21,600

21,600

Net amount to be adjusted

 

5280(Cr)

5280(Dr)