Solution for Adjustments Question with Distributed Profit and Omitted Interest on Capital

When solving an adjustment question where profit has already been distributed and interest on capital is omitted, the following steps should be taken:

1. Calculate the profit before distribution
This step involves calculating the profit before it was distributed among the partners. This can be done by subtracting the total expenses from the total revenue generated during the accounting period.

2. Determine the share of each partner
Once the total profit before distribution has been calculated, the next step is to determine the share of each partner. This can be done based on the agreed profit sharing ratio between the partners.

3. Distribute the profit
The profit is then distributed among the partners based on their respective profit sharing ratios. The distribution can be done by transferring the amount to the partners' capital accounts.

4. Calculate the interest on capital
The interest on capital is calculated based on the agreed rate of interest between the partners. This is usually a fixed percentage of the capital invested by each partner.

5. Adjust the capital accounts
The interest on capital is then added to each partner's capital account. This serves to increase the balance in their respective accounts.

6. Calculate the new profit sharing ratio
The new profit sharing ratio is calculated by dividing the adjusted capital balance by the total capital invested by all partners. This serves to adjust the profit sharing ratio based on the changes in the capital balance.

In conclusion, when solving an adjustment question where profit has already been distributed and interest on capital is omitted, it is important to follow the above steps to ensure that the accounts are properly adjusted and the correct profit sharing ratio is determined.

Firstly,reverse the P.Sharing.Entry . Now,calculate the any of interest on cap. sub from N/P .Now, distribute the remaining profits