JAIN AND GUPTA WERE PARTNERS IN A FIRM SHARING PROFITS IN THE RATIO 3:2 THEIR FIXED CAPITALS WERE JAINRS 1 00 000. AND GUPTA RS1 50 000. AFTER THE ACCOUNTS OF THE YEAR HAD BEEN CLOSED IT WAS DISCOVERED THAT INTEREST ON CAPITAL AT 10 % AS PROVIDED IN THE PARTNERSHIP AGREMENT HAS NOT CREDITED TO THE CAPITAL ACCOUNTS OF THE PARTNERS BEFORE DISTRIBUTION OF PROFIT.. PASS NECCESSARYJOURNAL ENTRY TO RECTIFY THE ERROR...PLSSS MERITNATION EXPERTSS HELP MEEE BY GIVING DETAILED EXPLANATIONS

Dear Student,
 
Statement Showing Adjustment
Particulars Jain Gupta Total
Interest on Capital to be credited (Cr.) 10,000 15,000 25,000
Sharing of above Loss (3 : 2) (Dr.) (15,000) (10,000) (25,000)
Net Effect (5,000) (Dr.) 5,000 (Cr.) NIL
       
Adjusting Journal Entry
Jain's Current A/c Dr. 5,000  
  To Gupta's Current A/c     5,000

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