CA Foundation Exam > CA Foundation Questions > A,B,C are partners in a firm sharing profits ...
Start Learning for Free
A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.?
Most Upvoted Answer
A,B,C are partners in a firm sharing profits and losses in the ratio o...
Adjustment Entry for Interest on Capital
Given:
Partners - A, B, C
Profit sharing ratio - 2:3:5
Fixed capital - ₹15,00,000, ₹30,00,000, ₹60,00,000
Interest on Capital - 12% instead of 10%
Step 1: Calculation of Interest on Capital
Interest on capital will be calculated on the basis of fixed capital invested by each partner.
A's Interest on Capital = ₹15,00,000 x 12% = ₹1,80,000
B's Interest on Capital = ₹30,00,000 x 12% = ₹3,60,000
C's Interest on Capital = ₹60,00,000 x 12% = ₹7,20,000
Step 2: Adjustment Entry
The adjustment entry will be made to credit the additional interest to each partner's capital account and debit the same amount to the firm's Profit and Loss Appropriation Account.
Journal entry will be as follows:
Partner's Capital Account Dr ₹(Interest on Capital)
To Profit and Loss Appropriation Account ₹(Interest on Capital)
For A's Capital Account:
A's Capital Account Dr ₹1,80,000
To Profit and Loss Appropriation Account ₹1,80,000
For B's Capital Account:
B's Capital Account Dr ₹3,60,000
To Profit and Loss Appropriation Account ₹3,60,000
For C's Capital Account:
C's Capital Account Dr ₹7,20,000
To Profit and Loss Appropriation Account ₹7,20,000
Step 3: Posting in Ledger Accounts
The above adjustment entry will be posted in the respective ledger accounts of each partner and Profit and Loss Appropriation Account.
Conclusion:
By following the above steps, we can pass the necessary adjustment entry for interest on capital and make the required changes in the accounts of partners and the firm.
Given:
Partners - A, B, C
Profit sharing ratio - 2:3:5
Fixed capital - ₹15,00,000, ₹30,00,000, ₹60,00,000
Interest on Capital - 12% instead of 10%
Step 1: Calculation of Interest on Capital
Interest on capital will be calculated on the basis of fixed capital invested by each partner.
A's Interest on Capital = ₹15,00,000 x 12% = ₹1,80,000
B's Interest on Capital = ₹30,00,000 x 12% = ₹3,60,000
C's Interest on Capital = ₹60,00,000 x 12% = ₹7,20,000
Step 2: Adjustment Entry
The adjustment entry will be made to credit the additional interest to each partner's capital account and debit the same amount to the firm's Profit and Loss Appropriation Account.
Journal entry will be as follows:
Partner's Capital Account Dr ₹(Interest on Capital)
To Profit and Loss Appropriation Account ₹(Interest on Capital)
For A's Capital Account:
A's Capital Account Dr ₹1,80,000
To Profit and Loss Appropriation Account ₹1,80,000
For B's Capital Account:
B's Capital Account Dr ₹3,60,000
To Profit and Loss Appropriation Account ₹3,60,000
For C's Capital Account:
C's Capital Account Dr ₹7,20,000
To Profit and Loss Appropriation Account ₹7,20,000
Step 3: Posting in Ledger Accounts
The above adjustment entry will be posted in the respective ledger accounts of each partner and Profit and Loss Appropriation Account.
Conclusion:
By following the above steps, we can pass the necessary adjustment entry for interest on capital and make the required changes in the accounts of partners and the firm.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.?
Question Description
A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.?.
A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.?.
Solutions for A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? defined & explained in the simplest way possible. Besides giving the explanation of
A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.?, a detailed solution for A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? has been provided alongside types of A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? theory, EduRev gives you an
ample number of questions to practice A,B,C are partners in a firm sharing profits and losses in the ratio of 2:3:5.their fixed capital were ₹15,00,000,₹30,00,000 and60,00,000 respectively.for the year 2016,interest on capital was credited to them @12%instead of 10%.pass the necessary adjustment entry.? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup