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Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry?
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Kumar and Raja were partners in a firm sharing profit in the ratio of ...
Adjustment Entry for Distribution of Profit
Given data:
- Partnership firm of Kumar and Raja
- Profit sharing ratio: 7:3
- Fixed capital: Kumar - 9,00,000; Raja - 4,00,000
- Partnership deed provides for interest on capital and salaries, but not provided for in profit distribution
- Profit for the year ended 31st March 2007: 2,78,000
Adjustments to be made:
1. Interest on capital @9% p.a. to be provided to partners
2. Kumar's salary of 50,000 per year to be deducted from profit
3. Raja's salary of 3,000 per month to be deducted from profit
Adjustment entry:
1. Interest on Capital
Kumar's interest on capital = 9,00,000 * 9% = 81,000
Raja's interest on capital = 4,00,000 * 9% = 36,000
Total interest on capital = 81,000 + 36,000 = 1,17,000
Adjustment entry:
Profit and Loss A/c Dr. 1,17,000
To Kumar's Capital A/c 81,000
To Raja's Capital A/c 36,000
2. Kumar's Salary
Kumar's salary = 50,000
Deduct from profit:
2,78,000 - 50,000 = 2,28,000
Adjustment entry:
Profit and Loss A/c Dr. 50,000
To Kumar's Salary A/c 50,000
3. Raja's Salary
Raja's salary = 3,000 * 12 = 36,000
Deduct from profit:
2,28,000 - 36,000 = 1,92,000
Adjustment entry:
Profit and Loss A/c Dr. 36,000
To Raja's Salary A/c 36,000
Final distribution of profit:
Profit after adjustments = 1,92,000
Profit sharing ratio = 7:3
Kumar's share = 1,92,000 * 7/10 = 1,34,400
Raja's share = 1,92,000 * 3/10 = 57,600
Adjustment entry:
Kumar's Capital A/c Dr. 53,400
Raja's Capital A/c Dr. 24,600
To Profit and Loss A/c 78,000
Explanation:
- Partnership firms have a partnership deed that outlines the terms and conditions of the partnership.
- In this case, the partnership deed provided for interest on capital and salaries, but these were not provided for in the profit distribution.
- Therefore, adjustments were made to account for these items and arrive at the actual profit for distribution.
- Interest on capital was calculated at 9% p.a. and deducted from the profit to arrive at the adjusted profit.
- Kumar's salary and Raja's salary were deducted from the adjusted profit to arrive at the final profit for distribution.
- The final profit was distributed in the profit sharing ratio of 7:3 between Kumar and Raja.
- Adjustment entries were made to account for the interest on capital, salaries, and distribution of profit.
Given data:
- Partnership firm of Kumar and Raja
- Profit sharing ratio: 7:3
- Fixed capital: Kumar - 9,00,000; Raja - 4,00,000
- Partnership deed provides for interest on capital and salaries, but not provided for in profit distribution
- Profit for the year ended 31st March 2007: 2,78,000
Adjustments to be made:
1. Interest on capital @9% p.a. to be provided to partners
2. Kumar's salary of 50,000 per year to be deducted from profit
3. Raja's salary of 3,000 per month to be deducted from profit
Adjustment entry:
1. Interest on Capital
Kumar's interest on capital = 9,00,000 * 9% = 81,000
Raja's interest on capital = 4,00,000 * 9% = 36,000
Total interest on capital = 81,000 + 36,000 = 1,17,000
Adjustment entry:
Profit and Loss A/c Dr. 1,17,000
To Kumar's Capital A/c 81,000
To Raja's Capital A/c 36,000
2. Kumar's Salary
Kumar's salary = 50,000
Deduct from profit:
2,78,000 - 50,000 = 2,28,000
Adjustment entry:
Profit and Loss A/c Dr. 50,000
To Kumar's Salary A/c 50,000
3. Raja's Salary
Raja's salary = 3,000 * 12 = 36,000
Deduct from profit:
2,28,000 - 36,000 = 1,92,000
Adjustment entry:
Profit and Loss A/c Dr. 36,000
To Raja's Salary A/c 36,000
Final distribution of profit:
Profit after adjustments = 1,92,000
Profit sharing ratio = 7:3
Kumar's share = 1,92,000 * 7/10 = 1,34,400
Raja's share = 1,92,000 * 3/10 = 57,600
Adjustment entry:
Kumar's Capital A/c Dr. 53,400
Raja's Capital A/c Dr. 24,600
To Profit and Loss A/c 78,000
Explanation:
- Partnership firms have a partnership deed that outlines the terms and conditions of the partnership.
- In this case, the partnership deed provided for interest on capital and salaries, but these were not provided for in the profit distribution.
- Therefore, adjustments were made to account for these items and arrive at the actual profit for distribution.
- Interest on capital was calculated at 9% p.a. and deducted from the profit to arrive at the adjusted profit.
- Kumar's salary and Raja's salary were deducted from the adjusted profit to arrive at the final profit for distribution.
- The final profit was distributed in the profit sharing ratio of 7:3 between Kumar and Raja.
- Adjustment entries were made to account for the interest on capital, salaries, and distribution of profit.
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Kumar and Raja were partners in a firm sharing profit in the ratio of ...
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Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry?
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Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry?.
Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry?.
Solutions for Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? in English & in Hindi are available as part of our courses for Commerce.
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Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry?, a detailed solution for Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? has been provided alongside types of Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? theory, EduRev gives you an
ample number of questions to practice Kumar and Raja were partners in a firm sharing profit in the ratio of 7:3 there fixed capital were : Kumar 9,00,000 and Raja 4,00,000. The partnership deed provide for the following but the profit for the year was distributed without providing for : (1) Interest on capital @9% p.a. (2) Kumar's salary 50,000 per year and Raja's salary 3,000 per month. The profit for the year ended 31st March 2007 was 2,78,000. Pass adjustment entry? tests, examples and also practice Commerce tests.
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