Commerce Exam > Commerce Questions > x,yand z are partners in a firm,sharing profi...
Start Learning for Free
x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry.
?
Most Upvoted Answer
x,yand z are partners in a firm,sharing profit and losses in the ratio...
Adjustment Journal Entry for Interest on Capital
Calculation of Interest on Capital:
Partner X: 300,000 x 10% = 30,000
Partner Y: 200,000 x 10% = 20,000
Partner Z: 100,000 x 10% = 10,000
Total Interest on Capital = 60,000
Adjustment Journal Entry:
Date: End of the year
Particulars Debit ($) Credit ($)
Interest on Capital Account 60,000
Partner X’s Capital Account 5/10 x 60,000 = 30,000
Partner Y’s Capital Account 3/10 x 60,000 = 18,000
Partner Z’s Capital Account 2/10 x 60,000 = 12,000
Explanation:
The adjustment journal entry is made to rectify the error of crediting interest on capital @8%p.a instead of 10%p.a. The entry involves debiting the Interest on Capital account and crediting the capital accounts of the partners in their profit and loss sharing ratio.
Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method
Fixed Capital Method: In this method, the capital contribution of each partner remains fixed throughout the existence of the firm, unless any changes are made to the agreement. The capital accounts of partners are maintained separately and the profit or loss is shared in the agreed upon ratio. Interest on capital is credited to the partners' capital accounts at a predetermined rate.
Fluctuating Capital Method: In this method, the capital contribution of partners can change over time due to various reasons such as investment or withdrawal of capital, distribution of profits or losses, etc. The capital accounts of partners are adjusted to reflect the changes in their capital contributions. The profit or loss is shared in the agreed upon ratio after adjusting the capital accounts. Interest on capital is also credited to the partners' capital accounts at a predetermined rate.
Overall, the maintenance of capital accounts is crucial for the proper management of a partnership firm. It helps in tracking the individual capital contributions, profits, losses, and interest on capital of each partner. This information is useful for making important financial decisions and ensuring transparency and accountability in the partnership.
Calculation of Interest on Capital:
Partner X: 300,000 x 10% = 30,000
Partner Y: 200,000 x 10% = 20,000
Partner Z: 100,000 x 10% = 10,000
Total Interest on Capital = 60,000
Adjustment Journal Entry:
Date: End of the year
Particulars Debit ($) Credit ($)
Interest on Capital Account 60,000
Partner X’s Capital Account 5/10 x 60,000 = 30,000
Partner Y’s Capital Account 3/10 x 60,000 = 18,000
Partner Z’s Capital Account 2/10 x 60,000 = 12,000
Explanation:
The adjustment journal entry is made to rectify the error of crediting interest on capital @8%p.a instead of 10%p.a. The entry involves debiting the Interest on Capital account and crediting the capital accounts of the partners in their profit and loss sharing ratio.
Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method
Fixed Capital Method: In this method, the capital contribution of each partner remains fixed throughout the existence of the firm, unless any changes are made to the agreement. The capital accounts of partners are maintained separately and the profit or loss is shared in the agreed upon ratio. Interest on capital is credited to the partners' capital accounts at a predetermined rate.
Fluctuating Capital Method: In this method, the capital contribution of partners can change over time due to various reasons such as investment or withdrawal of capital, distribution of profits or losses, etc. The capital accounts of partners are adjusted to reflect the changes in their capital contributions. The profit or loss is shared in the agreed upon ratio after adjusting the capital accounts. Interest on capital is also credited to the partners' capital accounts at a predetermined rate.
Overall, the maintenance of capital accounts is crucial for the proper management of a partnership firm. It helps in tracking the individual capital contributions, profits, losses, and interest on capital of each partner. This information is useful for making important financial decisions and ensuring transparency and accountability in the partnership.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method?
Question Description
x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method?.
x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method?.
Solutions for x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? defined & explained in the simplest way possible. Besides giving the explanation of
x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method?, a detailed solution for x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? has been provided alongside types of x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? theory, EduRev gives you an
ample number of questions to practice x,yand z are partners in a firm,sharing profit and losses in the ratio of 5:3:2 there fixed capitals were rs.300000,200000,100000 respectively.For the year interest on capital was credited to them @10%p.a instead of 8%p.a showing your working notes clearly ,pass the necessary adjustment journal entry. Related: Maintenance of Capital Accounts of Partners: Fixed and Fluctuating Capital Method? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce 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
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup