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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 equ?
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X, Y and Z are partners in firm. Their capitals are Rs. 20000, Rs. 100...
Journal Entries in the Books of the Firm when Interest on Capital is Provided and Profit Losses are Shared Equally
Step 1: Calculate Interest on Capital
- X's interest on capital = Rs. 20000 x 5% = Rs. 1000
- Y's interest on capital = Rs. 10000 x 5% = Rs. 500
- Z's interest on capital = Rs. 4000 x 5% = Rs. 200
- Total Interest on Capital = Rs. 1700
Step 2: Provide Interest on Capital
- X's Capital A/c Dr. Rs. 1000
- Y's Capital A/c Dr. Rs. 500
- Z's Capital A/c Dr. Rs. 200
- To Interest on Capital A/c Rs. 1700
Step 3: Share the Remaining Profit Equally
- Profit and Loss A/c Dr. Rs. 1100
- To X's Capital A/c Rs. 366.67
- To Y's Capital A/c Rs. 366.67
- To Z's Capital A/c Rs. 366.67
Explanation:
- The partners' capitals are the amount of money each partner has invested in the firm. In this case, X has invested Rs. 20000, Y has invested Rs. 10000, and Z has invested Rs. 4000.
- Each partner is entitled to receive interest on their capital at a rate of 5% per annum before any profit or loss is shared.
- The year's profit is Rs. 1100 before interest on capital is provided.
- To provide interest on capital, we need to calculate the interest each partner is entitled to receive based on their capital investment.
- Once we have calculated the interest, we can provide it to them by debiting their respective capital accounts and crediting the Interest on Capital account.
- The remaining profit after providing interest on capital is shared equally among the partners.
- To do this, we debit the Profit and Loss account and credit each partner's capital account with one-third of the remaining profit.
Step 1: Calculate Interest on Capital
- X's interest on capital = Rs. 20000 x 5% = Rs. 1000
- Y's interest on capital = Rs. 10000 x 5% = Rs. 500
- Z's interest on capital = Rs. 4000 x 5% = Rs. 200
- Total Interest on Capital = Rs. 1700
Step 2: Provide Interest on Capital
- X's Capital A/c Dr. Rs. 1000
- Y's Capital A/c Dr. Rs. 500
- Z's Capital A/c Dr. Rs. 200
- To Interest on Capital A/c Rs. 1700
Step 3: Share the Remaining Profit Equally
- Profit and Loss A/c Dr. Rs. 1100
- To X's Capital A/c Rs. 366.67
- To Y's Capital A/c Rs. 366.67
- To Z's Capital A/c Rs. 366.67
Explanation:
- The partners' capitals are the amount of money each partner has invested in the firm. In this case, X has invested Rs. 20000, Y has invested Rs. 10000, and Z has invested Rs. 4000.
- Each partner is entitled to receive interest on their capital at a rate of 5% per annum before any profit or loss is shared.
- The year's profit is Rs. 1100 before interest on capital is provided.
- To provide interest on capital, we need to calculate the interest each partner is entitled to receive based on their capital investment.
- Once we have calculated the interest, we can provide it to them by debiting their respective capital accounts and crediting the Interest on Capital account.
- The remaining profit after providing interest on capital is shared equally among the partners.
- To do this, we debit the Profit and Loss account and credit each partner's capital account with one-third of the remaining profit.
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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 equ?
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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 equ? 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 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 equ? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 equ?.
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 equ? 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 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 equ? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 equ?.
Solutions for 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 equ? in English & in Hindi are available as part of our courses for Class 12.
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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 equ?, a detailed solution for 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 equ? has been provided alongside types of 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 equ? theory, EduRev gives you an
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