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X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.?
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X, Y and Z were partners. They had no partnership deed. They had been ...
Adjusting Capital Accounts of Partners
The given problem requires us to adjust the capital accounts of partners, X, Y and Z, after they agreed to share profits in a new ratio and provide interest on their capital.
Retrospective Effect of New Profit Sharing Ratio
The new profit sharing ratio of 2:2:1 is to be applied retrospectively for the past three years. This means that we need to adjust the capital accounts of partners for the previous years as well.
Calculation of Share of Profit for Each Partner
To calculate the share of profit for each partner, we first need to calculate the total profit for each year.
- Total profit for 2014 = 40,000
- Total profit for 2015 = 50,000
- Total profit for 2016 = 63,000
Next, we need to calculate the share of profit for each partner for each year based on the new profit sharing ratio.
- Share of profit for X = (2/5) * Total profit
- Share of profit for Y = (2/5) * Total profit
- Share of profit for Z = (1/5) * Total profit
Adjustment for Interest on Capital
The partners have agreed to provide interest on their capital @ 5% p.a. (fixed). This means that we need to adjust the capital accounts of partners to include the interest earned on their capital for the past three years.
- Interest on capital for X = 5,000
- Interest on capital for Y = 4,000
- Interest on capital for Z = 3,000
Passing Entry to Adjust Capital Accounts
To adjust the capital accounts of partners, we need to pass the following entry:
Partner | Capital | Share of Profit | Interest | Total
------- | ------- | -------------- | -------- | -----
X | 1,00,000| 30,000 | 5,000 | 1,35,000
Y | 80,000 | 30,000 | 4,000 | 1,14,000
Z | 60,000 | 15,000 | 3,000 | 78,000
The above table shows the adjusted capital accounts of partners after taking into account the new profit sharing ratio and interest on capital.
In the entry, we debit the capital account of each partner with their original capital and the share of profit for the past three years. We also credit their capital account with the interest earned on their capital. The total column shows the total balance in each partner's capital account after the adjustments have been made.
Conclusion
In conclusion, adjusting the capital accounts of partners requires us to take into account the new profit sharing ratio and interest on capital. We need to pass an entry to adjust the capital accounts and ensure that each partner's capital account reflects their share of profit and interest earned on their capital.
The given problem requires us to adjust the capital accounts of partners, X, Y and Z, after they agreed to share profits in a new ratio and provide interest on their capital.
Retrospective Effect of New Profit Sharing Ratio
The new profit sharing ratio of 2:2:1 is to be applied retrospectively for the past three years. This means that we need to adjust the capital accounts of partners for the previous years as well.
Calculation of Share of Profit for Each Partner
To calculate the share of profit for each partner, we first need to calculate the total profit for each year.
- Total profit for 2014 = 40,000
- Total profit for 2015 = 50,000
- Total profit for 2016 = 63,000
Next, we need to calculate the share of profit for each partner for each year based on the new profit sharing ratio.
- Share of profit for X = (2/5) * Total profit
- Share of profit for Y = (2/5) * Total profit
- Share of profit for Z = (1/5) * Total profit
Adjustment for Interest on Capital
The partners have agreed to provide interest on their capital @ 5% p.a. (fixed). This means that we need to adjust the capital accounts of partners to include the interest earned on their capital for the past three years.
- Interest on capital for X = 5,000
- Interest on capital for Y = 4,000
- Interest on capital for Z = 3,000
Passing Entry to Adjust Capital Accounts
To adjust the capital accounts of partners, we need to pass the following entry:
Partner | Capital | Share of Profit | Interest | Total
------- | ------- | -------------- | -------- | -----
X | 1,00,000| 30,000 | 5,000 | 1,35,000
Y | 80,000 | 30,000 | 4,000 | 1,14,000
Z | 60,000 | 15,000 | 3,000 | 78,000
The above table shows the adjusted capital accounts of partners after taking into account the new profit sharing ratio and interest on capital.
In the entry, we debit the capital account of each partner with their original capital and the share of profit for the past three years. We also credit their capital account with the interest earned on their capital. The total column shows the total balance in each partner's capital account after the adjustments have been made.
Conclusion
In conclusion, adjusting the capital accounts of partners requires us to take into account the new profit sharing ratio and interest on capital. We need to pass an entry to adjust the capital accounts and ensure that each partner's capital account reflects their share of profit and interest earned on their capital.
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X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.?
Question Description
X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? 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 were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.?.
X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? 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 were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.?.
Solutions for X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? in English & in Hindi are available as part of our courses for Class 12.
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Here you can find the meaning of X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? defined & explained in the simplest way possible. Besides giving the explanation of
X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.?, a detailed solution for X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? has been provided alongside types of X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? theory, EduRev gives you an
ample number of questions to practice X, Y and Z were partners. They had no partnership deed. They had been in business for 3 years. Profit during 2014 was 40,000, 2015 50,000 and 2016 63,000. During 2017, they agreed to share profits in ratio 2:2:1 with retrospective effect. It was also decided to provide interest on partners' capital @ 5% p.a. (fixed). Their capitals were 1,00,000, 80,000 and 60,000 respectively. Pass entry to adjust the capital accounts.? tests, examples and also practice Class 12 tests.
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