Q. On 31st Mar 2017, Capital A/C bal. after making adjustment  of profits and drawings of Ekta, Ankit and Chahat are 150000, 210000 and 270000 respectively. Subsequently it was discovered that int. 0f cap. and draw. has been ommitted.
  • profit of 31st Mar 2017 was 120000
  • During the year Ekta withdrew Rs. 24000 an d Ankit and Chahat each withdraw a sum of Rs. 24000 in equal instalment in the middle of each quarter.
  • The int. on draw.  - 5% p.a. and int. of cap. - 10% p.a
  • Profit sharing ration 1:2:3

Showing working notes , pass the necessary journal entries 

Dear Student,
 
Date  Particulars  LF  Amount (in Rs)  Amount (in Rs)
   Chahat's Capital A/c  Dr  5,400  
       To Ekta's Capital A/c      5,400
   (Rectification entry passed)      
         

Workings:
 
Particulars  Ekta's Capital A/c  Ankit's Capital A/c  Chahat's Capital A/c  Firm
 Profits wrongly distributed  20,000 (Dr)  40,000 (Dr)  60,000 (Dr)  1,20,000 (Cr)
 Interest on Capital  17,400 (Cr)  23,400 (Cr)  29,400 (Cr)   70,200 (Dr)
 Interest on Drawings      600 (Dr)      600 (Dr)      600 (Dr)    1,800 (Cr)
 Remaining profit to be distributed in 1:2:3   8,600 (Cr)  17,200 (Cr)  25,800 (Cr)  51,600 (Dr)
 Net effect  5,400 (Cr)  --   5,400 (Dr)  NIL

a) Profit of 1,20,000 was shared in ratio of 1:2:3
b) Interest on Capital on
Ekta's Capital = 1,50,000+24,000×10100= 17,400
Ankit's Capital = 2,10,000+24,000×10100= 23,400
Chaht's Capital A/c = 2,70,000+24,000×10100=29,400
c) Interest on Drawings on 
Ekta's Capital = 24,000×5100×612=600
Ankit's & Chahat's Capital = 
24,000×5100×612=600
d) Final Profit =  1,20,000+1,800-70,200 = 51,600


 

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