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Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap?
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Class 12th accountancy - Ryan and shyam were partners in a firm. after...
Adjustment Entry for Interest on Capital and Drawings
Given data:
Profit for the year = Rs. 200,000
Ram's capital = Rs. 400,000
Shyam's capital = Rs. 300,000
Ram's drawings = Rs. 80,000
Shyam's drawings = Rs. 100,000
Interest on capital and drawings = 10% p.a.
Step 1: Calculation of Interest on Capital
Ram's interest on capital = 10% of Rs. 400,000 = Rs. 40,000
Shyam's interest on capital = 10% of Rs. 300,000 = Rs. 30,000
Step 2: Calculation of Interest on Drawings
Ram's interest on drawings = 10% of Rs. 80,000 = Rs. 8,000
Shyam's interest on drawings = 10% of Rs. 100,000 = Rs. 10,000
Step 3: Adjustment Entry
To record interest on capital and drawings, the following adjustment entry will be passed:
Ram's Capital A/c Dr. 48,000 (40,000 + 8,000)
Shyam's Capital A/c Dr. 40,000 (30,000 + 10,000)
To Interest on Capital A/c 70,000 (40,000 + 30,000)
To Interest on Drawings A/c 18,000 (8,000 + 10,000)
Explanation:
Ram's capital account will be debited with Rs. 48,000 (Rs. 40,000 for interest on capital and Rs. 8,000 for interest on drawings) and Shyam's capital account will be debited with Rs. 40,000 (Rs. 30,000 for interest on capital and Rs. 10,000 for interest on drawings). The Interest on Capital account will be credited with Rs. 70,000 (total interest on capital for both partners) and the Interest on Drawings account will be credited with Rs. 18,000 (total interest on drawings for both partners).
Conclusion:
The above adjustment entry will ensure that interest on capital and drawings, as per the partnership deed, is recorded in the books of accounts. It will also help in determining the true and fair view of the profits of the partnership firm.
Given data:
Profit for the year = Rs. 200,000
Ram's capital = Rs. 400,000
Shyam's capital = Rs. 300,000
Ram's drawings = Rs. 80,000
Shyam's drawings = Rs. 100,000
Interest on capital and drawings = 10% p.a.
Step 1: Calculation of Interest on Capital
Ram's interest on capital = 10% of Rs. 400,000 = Rs. 40,000
Shyam's interest on capital = 10% of Rs. 300,000 = Rs. 30,000
Step 2: Calculation of Interest on Drawings
Ram's interest on drawings = 10% of Rs. 80,000 = Rs. 8,000
Shyam's interest on drawings = 10% of Rs. 100,000 = Rs. 10,000
Step 3: Adjustment Entry
To record interest on capital and drawings, the following adjustment entry will be passed:
Ram's Capital A/c Dr. 48,000 (40,000 + 8,000)
Shyam's Capital A/c Dr. 40,000 (30,000 + 10,000)
To Interest on Capital A/c 70,000 (40,000 + 30,000)
To Interest on Drawings A/c 18,000 (8,000 + 10,000)
Explanation:
Ram's capital account will be debited with Rs. 48,000 (Rs. 40,000 for interest on capital and Rs. 8,000 for interest on drawings) and Shyam's capital account will be debited with Rs. 40,000 (Rs. 30,000 for interest on capital and Rs. 10,000 for interest on drawings). The Interest on Capital account will be credited with Rs. 70,000 (total interest on capital for both partners) and the Interest on Drawings account will be credited with Rs. 18,000 (total interest on drawings for both partners).
Conclusion:
The above adjustment entry will ensure that interest on capital and drawings, as per the partnership deed, is recorded in the books of accounts. It will also help in determining the true and fair view of the profits of the partnership firm.
Community Answer
Class 12th accountancy - Ryan and shyam were partners in a firm. after...
Shyam's capital A/C .....Dr 4500 To Ram' s capital A/C 4500( Being adjustment entry passed)working note: 1.Interest on drawing is charged for 6 months. 2.Interest on capital is calculated on opening capital . 3.opening capital =closing capital + Drawing -profit.Ram's opening capital = 400000+80000-100000 =380000Shyam's opening capital = 300000+100000-100000=300000interest on capital of Ram =380000×10÷100=38000.Interest on capital of shyam= 30000.Interest on drawing of Ram=80000×10×6÷1200=4000.shyam=100000×10×6÷1200=5000.thus amt to credited to Ram a/c = 38000-4000=34000.and shyam = 30000-5000=25000.Amount already cr=Ram = 4500(34000-29500)Shyam = (4500)(29500-25000)profit= 34000+25000=59000.Ram's and Shyam's of profit =59000÷2=29500.Ratio = 1:1.
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Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap?
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Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap?.
Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap?.
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Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap?, a detailed solution for Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? has been provided alongside types of Class 12th accountancy - Ryan and shyam were partners in a firm. after crediting the profits of the year Rs.200000 in their capital accounts, the balance of their capital's were : Ram Rs.400000 and Shyam Rs 300000. During the year Ram withdrew Rs.80000 and shyam withdrew Rs.100000. It was found that interest on capital and drawing @10% p.a, as provided in partnership deed had not been allowed and charged to the partners capital accounts . Pass necessary adjustment entry . plz answer asap? theory, EduRev gives you an
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