Question

$A,B$ and $C$ are partners in a firm. Though there is no provision in the Partnership Deed for interest on capital, this has been provided to the accounts @ $5\%$ p.a. for the two years ended 31st March, 2017 and 31st March, 2018. Their fixed capitals on Which interest was calculated throughout were: $A-Rs.50,000;B-Rs.40,000$ and $C-Rs.30,000$: During the two years, they shared profits as follows:
2016 - 2017 - 5:3:2
2017 - 2018 - 2:2:1
You are required to pass an adjustment entry as at 1st April, 2018.

Answer 1

C's current A/c Dr. 600

To A's current A/c 400

To B's current A/c 200

(Being adjustment entry passed)

Table showing Net Adjustments to be made

Particulars	A	B	C
Adjustments in 2017	500	(200)	(300)
Adjustments in 2018	(100)	400	(300)
Net Adjustments	400	200	(600)

Table showing adjustments to be made in 2017

Particulars	A	B	C
Interest on capital	(2500)	(2000)	(1500)
Profits	3000	1800	1200
Adjustments	500	(200)	(300)

Table showing adjustments to be made in the year 2018

Particulars	A	B	C
Interest on capital@5%	(2500)	(2000)	(1500)
Profits	2400	2400	1200
Adjustments	(100)	400	( 300)