Mannu and shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following is the balance sheet of the firm as on 31st March 2018:

BALANCE SHEET as at 31^st March, 2018

Liabilities

₹

Assets

₹

Mannu’s Capital 30,000 Drawings:

Shristhi’s Capital 10,000
40,000
Mannu 4,000

Shristhi 2,000 6,000

Other Assets 34,000

40,000 40,000

Profit for the year ended 31st March, 2018 was ₹ 5,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently enquired. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.

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Solution

Adjusting Journal Entry

Date

Particular

L.F

Debit Amount
(₹)

Credit Amount
(₹)

Shrishti's Capital A/c

Dr.

288

To Mannu's Capital A/c

288

(Adjustment of profit made)

Adjustment of Profit

Mannu’s

Shrishti

Total

Interest on Capital

1,500

500

=

2,000

Less: Interest on Drawings

(120)

(60)

=

(180)

Right distribution of Rs 1,820

1,380

440

=

1,820

Less: Wrong distribution of Rs 1,820 (3 : 2)

(1,092)

(728)

=

(1,820)

Adjusted Profit

288

(288)

=

NIL

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Q. Mannu and Shristhi are partners in a firm sharing profits in the ratio of

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Q. Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following is the balancesheet of the firm as on 31st March, 2018:

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Balance Sheet

as on March 31, 2006

$\begin{matrix} Liabilities & Amt. (Rs) & Assets & Amt. (Rs) Mannu's Capital & 30, 000 & Drawings Shristhi's Capital & 10, 000 - ------ - & 40, 000 & Mannu & 4, 000 Shristhi & 2, 000 - ---- - & 5, 000 Other Assets & 34, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 40, 000 - ------ - - ------ - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 40, 000 - ------ - - ------ - \end{matrix}$

Profit for the year ended March 31, 2006 was Rs 5,000 which was divided in the agreed ratio, but interest @5% pa on capital and @ 6% pa on drawings was inadvertently enquired. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.

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BALANCE SHEET as at 31^st March, 2018
Liabilities		₹	Assets		₹
Mannu’s Capital	30,000		Drawings:
Shristhi’s Capital	10,000	40,000	Mannu	4,000
			Shristhi	2,000	6,000
			Other Assets		34,000
		40,000			40,000

Date	Particular		L.F	Debit Amount (₹)	Credit Amount (₹)
	Shrishti's Capital A/c	Dr.		288
	To Mannu's Capital A/c				288
	(Adjustment of profit made)

	Mannu’s	Shrishti		Total
Interest on Capital	1,500	500	=	2,000
Less: Interest on Drawings	(120)	(60)	=	(180)
Right distribution of Rs 1,820	1,380	440	=	1,820
Less: Wrong distribution of Rs 1,820 (3 : 2)	(1,092)	(728)	=	(1,820)
Adjusted Profit	288	(288)	=	NIL