KRISHNA,SANDEEP AND KARIM ARE PARTNERS SHARING PROFIT IN THE RATIO OF 3:2:1.THEIR FIXED CAPITAL ARE:KRISHNA 1,20,000,SANDEEP 90,000 AND KARIM 60,000. FOR THE YEAR 2006-07,INTEREST WAS CREDITED TO THEM @6% p.a INSTEAD OF 5%p.a.RECORD ADJUSTMENT ENTRY.
Hey Gaurav, the solution to your query is here.
|Karim’s Current A/c||Dr.||150|
|To Karishna’s Current A/c||150|
|(Interest on Capital was credited @ 6% instead of 5%, now rectified)|
|Interest on Capital wrongly credited (Dr.)||7,200||5,400||3,600||16,200|
|Interest on Capital to be credited @ 5% (Cr.)||6,000||4,500||3,000||13,500|
|Profit of Rs 2,700 be credited (Cr.)||1,350||900||450||2,700|
|Net Effect||150 (Cr.)||150 (Dr.)||Nil|