R and S were partners in a firm sharing profits in 3:2 ratio. their respective fixed capitals were 1000000 and 1500000. the partnership deed provided for the following : 1) IOC 10%p.a 2)IOD 12%pa During the year ended 31.3.2007 , r's drawings were 1000 per month drawn at the end of ever month and s's drawings were 2000 per month drawn in the beginning of the every month. after the preparation of final accounts for the year ended 31.3.2007 it was discovered that interest on r's drawings were not taken into account. calculate iod on r'sdrawings and give necessary adjusting entry for the same.
Dear student
journal entry
interest on R's drawing = 10,000 X 12 X= rs 660[ ( total drawing X rate of interest X ( average period)/12)]
average period= ( 11 + 0)/ 2 = 5.5
table showing adjustment
Regards
journal entry
| date | particular | L.F | Dr.(rs) | Cr.(rs) |
| R'scurrent A/c ...Dr. To S's current A/c |
264 |
264 | ||
interest on R's drawing = 10,000 X 12 X= rs 660[ ( total drawing X rate of interest X ( average period)/12)]
average period= ( 11 + 0)/ 2 = 5.5
table showing adjustment
| particulars | R Dr. Cr. |
S Dr. Cr. |
Firm Dr. Cr. |
| interest on drawing | 660 | 660 | |
| for sharing above profit in the ratio 3:2 | 396 | 264 | 660 |
| 660 396 | - 264 | 660 660 | |
| balance to be adjusted ( net effect) | 264(Dr.) | 264(Cr.) |
Regards
