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PARTNERSHIP - FUNDAMENTAL - ISC-CBSE
| QUESTION |
Prabir and Queen partners in a firm sharing profits & losses equally. Their fixed capital were Rs 1,00,000 and Rs 50,000 respectively. The partnership deed provided for interest on capital at the rate of 10% per annum. For the year ended 31st. March 2023 the profits of the firm were distributed without providing Interest on Capital.
Pass necessary adjustment entry to rectify the erros.
| ANSWER |
| JOURNAL | ||||
| DATE | PARTICULAR | LF | DEBIT (RS) | CREDIT (RS) |
| 01.04.2022 | Queen's Current A/c …... Dr | 2500 | ||
| To Prabir's Current A/c | 2500 | |||
| ADJUSTMENT TABLE | ||||
| PARTICULAR | Prabir (Rs) | Queen (Rs) | Total (Rs) | |
| Interest | Add | 10000 | 5000 | 15000 |
| Profit are taken back | Minus | -7500 | -7500 | -15000 |
| Net Effect | 2500 | -2500 | 0 | |
| Cr. | Dr. | |||