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Xyz for partners they had no partnership deed they had been in business for 3 years profit for during 2019 was rupees 40000, 2020 was rupees 50000 and 2021 was rupees 63000 during 2022 they agreed to share profits in the ratio 2:2:1 with restrospective effect.it was also decided to provide interest on partners capital at the rate 5% pa there captals were 100000, 80000 and 60000. pass entry to adjust the capital account?
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Xyz for partners they had no partnership deed they had been in busines...
Adjustment of Capital Accounts for Xyz Partners
Adjusting the capital accounts for Xyz partners involves recognizing the retrospective effect of profit sharing ratios and the provision of interest on partners' capital. Below are the steps and entries required to adjust the capital accounts:

Step 1: Calculate the Share of Profits for Each Partner
- Calculate the total profits for the years 2019, 2020, and 2021.
- Apply the agreed profit-sharing ratio of 2:2:1 to allocate profits among partners.
- Determine the share of profits for each partner for each year.

Step 2: Calculate Interest on Partners' Capital
- Calculate the interest on partners' capital at the rate of 5% per annum.
- Determine the interest payable to each partner based on their respective capital amounts.

Step 3: Adjust Capital Accounts with Entries
- Debit or credit the capital accounts of partners based on their share of profits for each year.
- Debit the partnership account for interest on partners' capital.
- Credit each partner's capital account for their share of interest earned.
- Ensure that the total debits equal total credits to maintain balance in the capital accounts.

Example Journal Entry for 2022 Adjustment:
- Debit Partner A's Capital Account
- Debit Partner B's Capital Account
- Debit Partner C's Capital Account
- Credit Partnership Account
- Credit Partner A's Capital Account (for interest)
- Credit Partner B's Capital Account (for interest)
- Credit Partner C's Capital Account (for interest)
By following these steps and making the necessary journal entries, Xyz partners can accurately adjust their capital accounts to reflect the new profit-sharing ratios and provision of interest on partners' capital.
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Xyz for partners they had no partnership deed they had been in business for 3 years profit for during 2019 was rupees 40000, 2020 was rupees 50000 and 2021 was rupees 63000 during 2022 they agreed to share profits in the ratio 2:2:1 with restrospective effect.it was also decided to provide interest on partners capital at the rate 5% pa there captals were 100000, 80000 and 60000. pass entry to adjust the capital account?
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Xyz for partners they had no partnership deed they had been in business for 3 years profit for during 2019 was rupees 40000, 2020 was rupees 50000 and 2021 was rupees 63000 during 2022 they agreed to share profits in the ratio 2:2:1 with restrospective effect.it was also decided to provide interest on partners capital at the rate 5% pa there captals were 100000, 80000 and 60000. pass entry to adjust the capital account? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Xyz for partners they had no partnership deed they had been in business for 3 years profit for during 2019 was rupees 40000, 2020 was rupees 50000 and 2021 was rupees 63000 during 2022 they agreed to share profits in the ratio 2:2:1 with restrospective effect.it was also decided to provide interest on partners capital at the rate 5% pa there captals were 100000, 80000 and 60000. pass entry to adjust the capital account? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Xyz for partners they had no partnership deed they had been in business for 3 years profit for during 2019 was rupees 40000, 2020 was rupees 50000 and 2021 was rupees 63000 during 2022 they agreed to share profits in the ratio 2:2:1 with restrospective effect.it was also decided to provide interest on partners capital at the rate 5% pa there captals were 100000, 80000 and 60000. pass entry to adjust the capital account?.
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