The correct answer is option 1- B's Capital A/c Dr.. ₹450 To A's Capital A/c ₹300 To C's Capital A/c ₹150
SALARY: C's salary = 250 x 12 = 3,000 C got credit of ₹3000 as salary.
INTEREST ON CAPITAL: A's interest = 30,000 x 5/100 = 1,500 B's interest = 15,000 x 5/100 = 750 C's interest = 15,000 x 5/100 = 750 A, B & C got credit of ₹1,500, ₹750 & ₹750 as interest on capital. Total interest is ₹3,000.
TAKING BACK PROFIT FROM PARTNERS: Profit already distributed equally should be taken back. So, each partner will be debited with ₹6,000. This profit share is debited to partners capital account.
NEW PROFIT OF FIRM: Firm profit before interest and salary = 18,000.So, after adjusting salary and interest, firm's profit should be (18,000- ₹3,000 - 3,000) = 12,000. New net profit of ₹12,000 is distributed in partners in ratio of 2:2:1.
A's new profit share = 12,000 x 2/5 = ₹4,800
B's new profit share = 12,000 x 2/5 = ₹4,800
C's new profit share = 12,000 x 1/5 = ₹2,400 This new profit share is credited to partners capital account.
NET EFFECT: A should be credited with ₹300 (6,000 debit- 1,500 credit- 4,800 credit) B should be debited with ₹450 (6,000 debit- 750 credit- 4,800 credit) C should be credited with ₹150 (6,000 debit- 3,000 credit- 7,50 credit- 2,400 credit)
Adjustment entry is: B's Capital A/c Dr.. ₹450 To A's Capital A/c ₹300 To C's Capital A/c ₹150 |