Nancy, Sonu and Himani are partners sharing profits and losses in the ratio of 5:3:2. The partnership deed provides for charging interest on drawings @ 10%. The drawings of Nancy, Sonu and Himani during the year ending March 31, 2025 amounted to Rs.20,000, Rs.15,000 and Rs.10,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Choose the correct adjusting entry.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Sonu's Capital A/c Dr. 150 and Himani's Capital A/c Dr. 100, To Nancy's Capital A/c 250
Interest on drawings is charged to each partner and is an income of the firm, so it raises the profit that is divided among the partners. When it is left out, the partners are short-debited for their interest and the profit they shared was smaller by the same total. One adjusting entry puts both right at once: it compares, for each partner, the interest that should have been debited with the extra share of profit that should have been credited.
Interest that should have been debited (10% of drawings):
Nancy = 10% of Rs. 20,000 = Rs. 2,000
Sonu = 10% of Rs. 15,000 = Rs. 1,500
Himani = 10% of Rs. 10,000 = Rs. 1,000
Total = Rs. 4,500
Share of this Rs. 4,500 that should have been credited (ratio 5:3:2):
Nancy = Rs. 4,500 × 5/10 = Rs. 2,250
Sonu = Rs. 4,500 × 3/10 = Rs. 1,350
Himani = Rs. 4,500 × 2/10 = Rs. 900
Net effect on each partner:
Nancy = Rs. 2,250 − Rs. 2,000 = Rs. 250 short, so her account is credited
Sonu = Rs. 1,500 − Rs. 1,350 = Rs. 150 excess, so his account is debited
Himani = Rs. 1,000 − Rs. 900 = Rs. 100 excess, so her account is debited
Only the net figures are passed, so the entry carries Rs. 150, Rs. 100 and Rs. 250, not the full interest of Rs. 4,500 or Rs. 2,500.
In the book’s version the partners are Nusrat, Sonu and Himesh; Nusrat and Himesh stand for Nancy and Himani here, and the figures are the same.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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