Class 12 Exam  >  Class 12 Questions  >  4. X, Y and Z are partners in firm. Their cap... Start Learning for Free
4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal?
Most Upvoted Answer
4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. ...
Journal Entries for Providing Interest on Capital and Sharing Profit Losses Equally in a Partnership Firm

Step 1: Calculating Interest on Capital
Calculate interest on capital at 5% p.a. for X, Y and Z based on their respective capital amounts:

  • X: Rs. 20000 x 5% = Rs. 1000

  • Y: Rs. 10000 x 5% = Rs. 500

  • Z: Rs. 4000 x 5% = Rs. 200



Step 2: Recording Interest on Capital in the Books of the Firm
Debit Interest on Capital Account and credit X's Capital Account, Y's Capital Account and Z's Capital Account based on the interest amount calculated in Step 1:

  • Debit Interest on Capital Account: Rs. 1000 + Rs. 500 + Rs. 200 = Rs. 1700

  • Credit X's Capital Account: Rs. 1000

  • Credit Y's Capital Account: Rs. 500

  • Credit Z's Capital Account: Rs. 200



Step 3: Sharing Profit Losses Equally
Share the remaining profit of Rs. 1100 equally among X, Y and Z:

  • X: Rs. 1100/3 = Rs. 366.67

  • Y: Rs. 1100/3 = Rs. 366.67

  • Z: Rs. 1100/3 = Rs. 366.67



Step 4: Recording Profit Losses in the Books of the Firm
Debit Profit and Loss Account and credit X's Capital Account, Y's Capital Account and Z's Capital Account based on the profit loss amount calculated in Step 3:

  • Debit Profit and Loss Account: Rs. 1100

  • Credit X's Capital Account: Rs. 366.67

  • Credit Y's Capital Account: Rs. 366.67

  • Credit Z's Capital Account: Rs. 366.67



In summary, the journal entries in the books of the firm will be:

  • Debit Interest on Capital Account: Rs. 1700

  • Credit X's Capital Account: Rs. 1000

  • Credit Y's Capital Account: Rs. 500

  • Credit Z's Capital Account: Rs. 200

  • Debit Profit and Loss Account: Rs. 1100

  • Credit X's Capital Account: Rs. 366.67

  • Credit Y's Capital Account: Rs. 366.67

  • Credit Z's Capital Account: Rs. 366.67

Explore Courses for Class 12 exam

Similar Class 12 Doubts

4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal?
Question Description
4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal?.
Solutions for 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? in English & in Hindi are available as part of our courses for Class 12. Download more important topics, notes, lectures and mock test series for Class 12 Exam by signing up for free.
Here you can find the meaning of 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? defined & explained in the simplest way possible. Besides giving the explanation of 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal?, a detailed solution for 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? has been provided alongside types of 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? theory, EduRev gives you an ample number of questions to practice 4. X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 10000 and Rs. 4000 respectively. On which they are entitled to receive 5% p.a. interest. Before providing interest on capital the year’s profit was Rs.1100. Pass necessary journal entries in the books of the firm when interest on capital is provided and profit losses are shared equal? tests, examples and also practice Class 12 tests.
Explore Courses for Class 12 exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev