Solve this: Q180 Ajay, Binay Chetan were partners sharing profits in the ratio 3:3:2 The - Accountancy - Accounting for Partnership Basic Concepts

Question

Solve this:

Q180 Ajay, Binay & Chetan were partners sharing profits in the
ratio 3:3:2 The Partnership Deed provided for the following:
(i) Salary of Rs 2000 per quarter to Ajay & Binay
(ii) Chetan was entitled to a commission of Rs 8000
(iii) Binay was guaranteed a profit of Rs 50,000 p a
The profit of the firm for the year ended 31st March, 2015 was Rs
1,50,000 which was distributed among Ajay, Binay & Chetan in
the ratio 2:2:1, without taking into consideration the provisions
of Partnership Deed Pass Necessary rectifying entry for the above
adjustments in the books of the firm Show your workings clearly
[Ans Dr Ajay's Capital A/c- Rs 6400; Binay's Capital A/c Rs 2000;
Cr Chetan's Capital A/c 8400]

Neha Chopra · Accepted Answer

Dear Student

Rectification entry

Ajay's Capital
A/c
Dr
6,400

Binay's Capital
A/c
Dr
2,000

To Chetan's Capital
A/c

8,400

(Being rectification
made)

Statement of Working
of rectification

Particulars
Ajay
Binay
Chetan
Total

Distribution as per
Partnership deed :

Salary
8,000
8,000

16,000

Commission

8,000
8,000

Profit Distribution
(Note)
45,600
50,000
30,400
126,000

Total Credits that
should have been made
53,600
58,000
38,400
150,000

Actual
Distribution

Profit shared in
(2:2:1)
60,000
60,000
30,000
150000

Difference : As per
deed - Actual
(6,400)
(2,000)
8,400
-

Debit
Debit
Credit

Profit
distribution

Total
Profit
150,000

Less :
Salary
of ajay
and
binay
16,000

Less : Commission of
Chetan
8,000

Profit available for
Distribution
126,000

As per PSR
(3:3:8)

Ajay
47,250

Binay
47,250

Chetan
31,500

Profit share
guaranteed to Binay to be transferred to his capital
A/c
50,000

Deficiency to be borne
by Ajay and Chetan in 3:2(PSR)
2,750

Deficiency share of
Ajay
1,650

Actual profit
transferred to Ajay
45,600

Deficiency share of
Chetan
1,100

Actual profit
transferred to Chetan
30,400

Regards

Ajay's Capital A/c	Dr.	6,400
Binay's Capital A/c	Dr.	2,000
To Chetan's Capital A/c			8,400
(Being rectification made)

Statement of Working of rectification
Particulars	Ajay	Binay	Chetan	Total
Distribution as per Partnership deed :
Salary	8,000	8,000		16,000
Commission			8,000	8,000
Profit Distribution (Note)	45,600	50,000	30,400	126,000
Total Credits that should have been made	53,600	58,000	38,400	150,000

Actual Distribution
Profit shared in (2:2:1)	60,000	60,000	30,000	150000

Difference : As per deed - Actual	(6,400)	(2,000)	8,400	-
	Debit	Debit	Credit

Profit distribution
Total Profit	150,000
Less : Salary of ajay and binay	16,000
Less : Commission of Chetan	8,000
Profit available for Distribution	126,000

As per PSR (3:3:8)
Ajay	47,250
Binay	47,250
Chetan	31,500

Profit share guaranteed to Binay to be transferred to his capital A/c	50,000
Deficiency to be borne by Ajay and Chetan in 3:2(PSR)	2,750

Deficiency share of Ajay	1,650
Actual profit transferred to Ajay	45,600

Deficiency share of Chetan	1,100
Actual profit transferred to Chetan	30,400