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Mudit, Sudhi, and Uday are partners in A firm sharing profit in the ratio 3:1:1.Their fixed capital are 400000,160000,120000.Net profit for the yr ended 31 march distributed among the partners was 100000,without taking into account the following adjustment a-int. On capital @2.5% b- salary to mudit 18000pa and commission to uday 12000 d- mudit was allowed a commission of 6% of divisible profit after charging such commission Pass rectify entry?
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Rectifying Entry for Adjustment

Background:
Mudit, Sudhi, and Uday are partners in a firm and share the profits in the ratio of 3:1:1. The fixed capitals of the partners are Mudit - $400,000, Sudhi - $160,000, and Uday - $120,000. The net profit for the year ended on 31 March was $100,000, which was distributed among the partners without considering the following adjustments:

a) Interest on Capital @2.5%
b) Salary to Mudit - $18,000 per annum
c) Commission to Uday - $12,000
d) Mudit was allowed a commission of 6% of the divisible profit after charging such commission.

Rectifying Entry:

To rectify the above adjustments, the following entries need to be passed:

1. Adjustment for Interest on Capital:
Interest on capital is calculated on the partners' fixed capitals at the agreed rate of 2.5%.
- Mudit's interest = $400,000 * 2.5% = $10,000
- Sudhi's interest = $160,000 * 2.5% = $4,000
- Uday's interest = $120,000 * 2.5% = $3,000

Rectifying Entry:
Interest on Capital A/c Dr. $17,000
To Mudit's Capital A/c $10,000
To Sudhi's Capital A/c $4,000
To Uday's Capital A/c $3,000

2. Adjustment for Salary:
Salary of Mudit is $18,000 per annum.

Rectifying Entry:
Salary A/c Dr. $18,000
To Mudit's Capital A/c $18,000

3. Adjustment for Commission:
Commission to Uday is $12,000.
Mudit is also entitled to a commission of 6% of the divisible profit after charging such commission.
Divisible profit = Net profit - Salary - Commission to Uday
Divisible profit = $100,000 - $18,000 - $12,000 = $70,000
Mudit's commission = $70,000 * 6% = $4,200

Rectifying Entry:
Commission A/c Dr. $16,200
To Uday's Capital A/c $12,000
To Mudit's Capital A/c $4,200

After passing the above rectifying entries, the accounts will be correctly adjusted for the given adjustments. The partners' capital accounts will reflect the correct interest on capital, salary, and commission, ensuring the proper distribution of profits among the partners.
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Mudit, Sudhi, and Uday are partners in A firm sharing profit in the ratio 3:1:1.Their fixed capital are 400000,160000,120000.Net profit for the yr ended 31 march distributed among the partners was 100000,without taking into account the following adjustment a-int. On capital @2.5% b- salary to mudit 18000pa and commission to uday 12000 d- mudit was allowed a commission of 6% of divisible profit after charging such commission Pass rectify entry?
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Mudit, Sudhi, and Uday are partners in A firm sharing profit in the ratio 3:1:1.Their fixed capital are 400000,160000,120000.Net profit for the yr ended 31 march distributed among the partners was 100000,without taking into account the following adjustment a-int. On capital @2.5% b- salary to mudit 18000pa and commission to uday 12000 d- mudit was allowed a commission of 6% of divisible profit after charging such commission Pass rectify entry? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mudit, Sudhi, and Uday are partners in A firm sharing profit in the ratio 3:1:1.Their fixed capital are 400000,160000,120000.Net profit for the yr ended 31 march distributed among the partners was 100000,without taking into account the following adjustment a-int. On capital @2.5% b- salary to mudit 18000pa and commission to uday 12000 d- mudit was allowed a commission of 6% of divisible profit after charging such commission Pass rectify entry? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mudit, Sudhi, and Uday are partners in A firm sharing profit in the ratio 3:1:1.Their fixed capital are 400000,160000,120000.Net profit for the yr ended 31 march distributed among the partners was 100000,without taking into account the following adjustment a-int. On capital @2.5% b- salary to mudit 18000pa and commission to uday 12000 d- mudit was allowed a commission of 6% of divisible profit after charging such commission Pass rectify entry?.
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