Question

P, Q and R partners in a firm. Their capital accounts stood at Rs 90,000 Rs 45,000 and Rs 45,000 respectively on 31st March, 2017.
1. R was to be allowed a remuneration of Rs 9,000 p.a.
2. Interest at 5% p.a. was to be provided on capitals.
3. Profits were to be divided in the ratio of 2 : 2 : 1. Ignoring the above items, net profit of Rs 54,000 for the year ended 31.03.2017. It was divided among the three partners equally. Make Journal Entry for rectification and show workings.

Answer 1

Analytical Table

Adjustment Entry
Q’ Capital A/c Dr. 1,170
To P’ Capital A/c 1,080
To R’* Capital A/c 90
(Adjustment of partners A/c made)