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A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books?
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A,B,and K were partners sharing profits in the ratio of 3:3:2 The part...
Rectifying Entry for Adjustments in Partnership Accounts
Adjustment 1: Salary of A and B
- A and B are entitled to a salary of ₹ 4,000 per half year.
- These salaries were not considered while distributing profits.
- Rectifying entry: Debit Profit and Loss Account by ₹ 8,000 (4,000 x 2) and Credit A and B's Capital Accounts by ₹ 4,000 each.
Adjustment 2: Commission to K
- K is entitled to a commission of ₹ 8,000.
- This commission was not considered while distributing profits.
- Rectifying entry: Debit Profit and Loss Account by ₹ 8,000 and Credit K's Capital Account by ₹ 8,000.
Adjustment 3: Guaranteed Profit to A
- A is guaranteed a profit of ₹ 50,000 p.a.
- The actual profit for the year ended 31 Mar 2023 was ₹ 1,50,000.
- Rectifying entry: Debit A's Capital Account by ₹ 50,000 and Credit Profit and Loss Account by ₹ 1,00,000 (50,000 x 2).
Explanation
- The given partnership deed provides for certain provisions such as salary, commission, and guaranteed profit to the partners.
- These provisions are to be considered while distributing profits among the partners.
- However, while distributing profits for the year ended 31 Mar 2023, these provisions were not considered.
- Therefore, we need to pass rectifying entries to adjust the accounts and give effect to the provisions of the partnership deed.
- The first adjustment is for the salary of A and B, which was not considered while distributing profits. The rectifying entry debits the Profit and Loss Account and credits A and B's Capital Accounts.
- The second adjustment is for the commission to K, which was also not considered while distributing profits. The rectifying entry debits the Profit and Loss Account and credits K's Capital Account.
- The third adjustment is for the guaranteed profit to A, which was not taken into account while distributing profits. The rectifying entry debits A's Capital Account and credits the Profit and Loss Account.
- These adjustments will ensure that the accounts are adjusted as per the provisions of the partnership deed and the profits are distributed among the partners in the correct ratio.
Adjustment 1: Salary of A and B
- A and B are entitled to a salary of ₹ 4,000 per half year.
- These salaries were not considered while distributing profits.
- Rectifying entry: Debit Profit and Loss Account by ₹ 8,000 (4,000 x 2) and Credit A and B's Capital Accounts by ₹ 4,000 each.
Adjustment 2: Commission to K
- K is entitled to a commission of ₹ 8,000.
- This commission was not considered while distributing profits.
- Rectifying entry: Debit Profit and Loss Account by ₹ 8,000 and Credit K's Capital Account by ₹ 8,000.
Adjustment 3: Guaranteed Profit to A
- A is guaranteed a profit of ₹ 50,000 p.a.
- The actual profit for the year ended 31 Mar 2023 was ₹ 1,50,000.
- Rectifying entry: Debit A's Capital Account by ₹ 50,000 and Credit Profit and Loss Account by ₹ 1,00,000 (50,000 x 2).
Explanation
- The given partnership deed provides for certain provisions such as salary, commission, and guaranteed profit to the partners.
- These provisions are to be considered while distributing profits among the partners.
- However, while distributing profits for the year ended 31 Mar 2023, these provisions were not considered.
- Therefore, we need to pass rectifying entries to adjust the accounts and give effect to the provisions of the partnership deed.
- The first adjustment is for the salary of A and B, which was not considered while distributing profits. The rectifying entry debits the Profit and Loss Account and credits A and B's Capital Accounts.
- The second adjustment is for the commission to K, which was also not considered while distributing profits. The rectifying entry debits the Profit and Loss Account and credits K's Capital Account.
- The third adjustment is for the guaranteed profit to A, which was not taken into account while distributing profits. The rectifying entry debits A's Capital Account and credits the Profit and Loss Account.
- These adjustments will ensure that the accounts are adjusted as per the provisions of the partnership deed and the profits are distributed among the partners in the correct ratio.
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A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books?
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A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books?.
A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books?.
Solutions for A,B,and K were partners sharing profits in the ratio of 3:3:2 The partnership Deed provided for the follow Salary of ₹ 4,000 per half year toA and B K was entitled to a commission of ₹ 8,000. A was guaranteed a profit of ₹ 50,000 p.a. The profit of firm for year ended 31 Mar 2023 was ₹ 1, 50,000 which distributed among A,B,and K in the ratio of 1:2:2, without taking into consideration the provisions of partnershipdeed Pass necessary rectifying entry for the above adjustments in the books? in English & in Hindi are available as part of our courses for Commerce.
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