Please answer question no 91:
91. Ajay, Binay and Chetan were partners sharing profits in the ratio of 3:3:2. The partnership deed provided for the following:
(i) Salary of Rs. 2,000 per quarter to Ajay and Binay.
(ii) Chetan was entitled to 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 and Chetan is the ratio of 2:2:1, without taking into consideration the provisions of Partnership Deep. Pass necessary rectifying entry for the above adjustments in the books of the firm. Show your working clearly.
| Journal | |||||
| Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
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| Ajay’s Capital A/c | Dr. |
| 6,400 |
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| Binay’s Capital A/c | Dr. |
| 2,000 |
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| To Chetan’s Capital A/c |
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| 8,400 |
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| (Adjustment entry made) |
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Working Notes:
WN1: Profit & Loss Appropriation A/c
| Profit and Loss Appropriation Account for the year ended 31st March, 2015 | ||||||
| Dr. |
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| Cr. | |||
| Particulars | Amount Rs | Particulars | Amount Rs | |||
| Salary: |
| Profit and Loss A/c | 1,50,000 | |||
| Ajay | 8,000 |
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| Binay | 8,000 | 16,000 |
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| Chetan’s Capital A/c (Commission) | 8,000 |
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| Profit transferred to: |
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| Ajay’s Capital A/c (47,250 - 1,650) | 45,600 |
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| Binay’s Capital A/c (47,250 + 2,750) | 50,000 |
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| Chetan’s Capital A/c (31,500 -1,100) | 30,400 | 1,26,000 |
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| 1,50,000 |
| 1,50,000 | |||
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WN2: Statement Showing Adjustment
| Statement Showing Adjustment | ||||
| Particulars | Ajay | Binay | Chetan | Total |
| Salary to be provided | 8,000 | 8,000 | - | (16,000) |
| Commission to be provided |
|
| 8,000 | (8,000) |
| Profit to be credited | 45,600 | 50,000 | 30,400 | (1,26,000) |
| Total | 53,600 | 58,000 | 38,400 | (1,50,000) |
| Profit already distributed | (60,000) | (60,000) | (30,000) | 1,50,000 |
| Net Effect | (6,400) | (2,000) | 8,400 | NIL |