Question

A, B & C are partners in a firm sharing profits & losses in ratio of 2:3:5. Their fixed capitals were Rs. 15,00,000, Rs. 30,00,000 & Rs. 60,00,000 respectively.. For the year ended 31st March 2015, interest was credited @12% instead of 10%. Pass the necessary adjustment entry.

• A. B's Capital A/c Dr 15,000
  To A's Capital A/c 3,000
  To C's Capital A/c 12,000
• B. C's Capital A/c Dr 15,000
  To B's Capital A/c 3,000
  To A's Capital A/c 12,000
• C. A's Capital A/c Dr 15,000
  To B's Capital A/c 3,000
  To C's Capital A/c 12,000
• D. None of these

Answer 1

The correct option is B

C's Capital A/c Dr 15,000
To B's Capital A/c 3,000
To A's Capital A/c 12,000

Table Showing Adjustment

$\begin{array}{ccccc}& \text{A(Rs)}& \text{B(Rs)}& \text{C(Rs)}& \text{Total}\\ \text{Interest already credited}@12\%& 1,80,000& 3,60,000& 7,20,000& 12,60,000\\ \text{Interest that should have been credited}@10\%& 1,50,000& 3,00,000& 6,00,000& 10,50,000\\ \text{Partners over credited with}& 30,000& 60,000& 1,20,000& 2,10,000\\ \text{By recovering this interest profits will be}& & & & \\ \text{increased by Rs 2,10,000 \& divided in 2:3:5}& 42,000& 63,000& 1,05,000& 2,10,000\\ \text{Net Effect}& 12,000& 3,000& 15,000& \underset{–}{}\\ & \text{Cr.}& \text{Cr.}& \text{Dr.}& \underset{–}{}\end{array}$