Nagina, Pratap and Himesh are partners sharing profits and losses in the ratio of 5:3:2. The partnership deed provides for charging interest on drawings @ 5% p.a. The drawings of Nagina, Pratap and Himesh during the year ending March 31, 2025 amounted to Rs. 40,000, Rs. 15,000 and Rs. 15,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Give necessary adjusting journal entry.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Nagina’s Capital A/c Dr 250, Himesh’s Capital A/c Dr 50, To Pratap’s Capital A/c 300
When interest on drawings is left out, no partner was charged his interest, and the profit shared out was smaller by the same total. The adjusting entry puts each partner where he would have been: interest he should have been charged against the extra profit share he should have received.
Interest on drawings at 5% for a year: Nagina Rs. 2,000, Pratap Rs. 750, Himesh Rs. 750; total Rs. 3,500
Rs. 3,500 shared 5 : 3 : 2: Nagina Rs. 1,750, Pratap Rs. 1,050, Himesh Rs. 700
Nagina: charged Rs. 2,000, credited Rs. 1,750, so debit Rs. 250
Pratap: charged Rs. 750, credited Rs. 1,050, so credit Rs. 300
Himesh: charged Rs. 750, credited Rs. 700, so debit Rs. 50
The debits of Rs. 250 + Rs. 50 equal the credit of Rs. 300, so the entry balances. No dates are given for the drawings, so interest is taken for the full year; only that gives one of the amounts in the options.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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