Suresh and Ramesh were partners in a firm sharing profits in the ratio of 3:2 Their fixed capitals were - Accountancy - Accounting for Partnership Basic Concepts

Journal Entry

Particulars

Debit Amount
Rs

Credit Amount
Rs

Ramesh’s Current A/c

To Suresh’s Current A/c

(Profit was wrongly distributed and Interest on Capital and Salary has not been charged, now rectified)

Question

Suresh and Ramesh were partners in a firm sharing profits in the
ratio of 3:2 Their fixed capitals were Suresh-Rs 9,00,000 and
Ramesh-Rs 6,00,000 The partnership deed provided for the
following:
(i) Interest on capital @ 5% p a
(ii) Rs 60,000 p a salary to Suresh and salary of Rs 2,000 per
month to Ramesh
The profit earned by the firm for the year ended 31 3 2007 was
Rs 2,34,000 The profits were divided equally without providing for
the above Pass adjustment entry

Manisha Arora · Accepted Answer

Journal
Entry

Date

Particulars
L F
Debit Amount
Rs
Credit Amount
Rs

Ramesh’s Current A/c
Dr

33,000

To Suresh’s Current A/c

33,000

(Profit was wrongly
distributed and Interest on Capital and Salary has not been
charged, now rectified)

Adjusting Table:

Particulars
Suresh
Ramesh
Total

Profit wrongly distributed in the ratio
1:1 (Dr )
1,17,000
1,17,000
2,34,000

Interest on Capital @5% (Cr )
45,000
30,000
75,000

Salary
60,000
24,000
84,000

Profit after adjustment (Dr )
12,000
63,000
75,000

Right distribution of Profit of Rs 75,000
in the ratio 3:2 (Cr )
45,000
30,000
75,000

Difference
33,000 (Cr )
33,000 (Dr )
Nil

Particulars	Suresh	Ramesh	Total
Profit wrongly distributed in the ratio 1:1 (Dr.)	1,17,000	1,17,000	2,34,000
Interest on Capital @5% (Cr.)	45,000	30,000	75,000
Salary	60,000	24,000	84,000
Profit after adjustment (Dr.)	12,000	63,000	75,000
Right distribution of Profit of Rs 75,000 in the ratio 3:2 (Cr.)	45,000	30,000	75,000
Difference	33,000 (Cr.)	33,000 (Dr.)	Nil