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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.



Your Answer
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 

Correct Answer
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 

Your Answer
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 

Your Answer
D

None of these


Solution

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

A(Rs)B(Rs)C(Rs)TotalInterest already credited @ 12%1,80,0003,60,0007,20,00012,60,000Interest that should have been credited @ 10%1,50,0003,00,0006,00,00010,50,000Partners over credited with30,00060,0001,20,0002,10,000By recovering this interest profits will be increased by Rs 2,10,000 & divided in 2:3:542,00063,0001,05,0002,10,000Net Effect12,0003,00015,000    Cr.Cr.Dr.    

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