Question

$A$ and $B$ are partners in a firm sharing profits and losses in the ration of $3:2$. Follwoing was the Balance Sheet of the firm as at 31st March, 2018. (Ref. image)
Profit $Rs.30,000$ for the year ended 31st March, 2018 was divided between the partners without allowing interest on capitals @ $12\%$ 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 necessary adjustment Journal entry and show your working dearly.

Answer 1

Rectification Entry is as follows:-

B's capital A/c Dr. 5280

To A's capital A/c 5280

(Being adjustment entry passed)

Calculation of Opening Capital

A B

Closing Capital 60,000 20,000

Add:Drawings 10,000 20,000

Less:Profits (18,000) (12,000)

Opening Capital 52,000 28,000

Interest on capital @12% 6240 3360

Table Showing Adjustments To be Made

Particulars	A	B
Interest on capital	6240	3360
Salary	12,000
Profit to be credited(30,000-12,000-6240-3360)	5040	3360
Less:wrongly credited profits	(18,000)	(12,000)
Net Effects	5280	(5280)