JAIN AND GUPTA WERE PARTNERS IN A FIRM SHARING PROFITS IN THE RATIO 3:2 THEIR FIXED CAPITALS WERE JAINRS 1 - Accountancy - Accounting for Partnership Basic Concepts

Question

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

Neha A. · Accepted Answer

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

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