RV Educations ( Classes by : Nishkaam

Johar ; Contact no. 9041604726)

ASSIGNMENT -02 ( PAST ADJUSTMENTS)

1. The net profit of X, Y and Z for the year ended March 31, 2016 was Rs 60,000 and the same was
distributed among them in their agreed ratio of 3:1:1. It was subsequently discovered that the under
mentioned transactions were not recorded in the books:
(i) Interest on capital @ 5% p.a.
(ii) Interest on drawings amounting to X Rs 700, Y Rs 500 and Z Rs 300.
(iii)Partner’s salary X Rs 1000, Y Rs 1500 p.a..
The capital accounts of partners were fixed as: X Rs 1,00,000, Y Rs 80,000 and Z Rs 60,000.
Record the adjustment entry.
2. On March 31, 2017 the balance in the capital Accounts of Elen, Monu and Ahmed after making
adjustments for profits, drawings etc. were Rs 80,000, Rs 60,000 and Rs 40,000 resp. Subsequently, it was
discovered that interest on capital and interest on drawings had been omitted.
The partners were entitled to interest on capital @ 5% p.a. The drawings during
the year were Elen Rs 20,000; Monu Rs 15,000 and Ahmed Rs 9,000. Interest on drawings chargeable to
partners were Elen Rs 500, Monu Rs 360 and Ahmed Rs 200. The net profit during the year amounted to
Rs 1,20,000. The profit sharing ratio was 3:2:1. Record necessary adjustment entry.
3. Nusrat, Sonu and Himesh are partners sharing profits and losses in the ratio of 5:3:2. The partnership deed
provides for charging interest on drawings @ 10% p.a. the drawings of nusrat, sonu and himesh during
the year ending March 31 2015 amounted to Rs 20,000, Rs 15,000 and Rs 10,000 resp. After the final
accounts have been prepared, it was discovered that interest on drawings has not been taken into
consideration. Give necessary adjusting journal entry.
4. P, Q and R were partners with fixed capital of Rs 40,000, Rs 32,000 and Rs 24,000. After distributing the
profit of Rs 48,000 for the year ended 31st march 2022 in their agreed ratio of 3:1:1. It was observed that:
(i) Interest on capital was provided at 10% p.a. instead of 8% p.a.
(ii) Salary of Rs 12,000 was credited to P instead of Q.
You are required to pass a single journal entry in the beginning of the next year to rectify the
above omissions.
5. Following is the profit and loss Appropriation Account of a firm in which A, B and C are equal partners.

Particulars Rs Particulars Rs
To profits ( Divisible) 3,00,000 By profit & loss A/c ( net 3,00,000
profit)
A’s capital 1,00,000
B’s capital 1,00,000
C’s capital 1,00,000

After preparing the final accounts, it was known that interest on capital amounting to A Rs 12,000, B Rs
9,600 and C Rs 10,500 was not allowed and also interest was not charged on drawings of A and B
amounting to A Rs 1,200 and B Rs 900. Pass an adjustment entry to rectify the given adjustment.
6. Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2:3. The following
was the balance sheet of the firm as on 31st march 2019:

Liabilities Rs Assets Rs
Capital: Puneet 90,000 Sundry Assets 2,00,000
Akshara 1,10,000
 The profits Rs 40,000 for the year ended 31st march 2019 were divided between the partners without
allowing interest on capital @ 5% p.a. and commission to akshara @ Rs 1000 per quarter. The drawings
of the partners during the year were:
Puneet Rs 2500 per month.
Akshara Rs 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.
7. A, B and C were partners . Their capitals were A- Rs 30,000; B Rs 20,000 and C Rs 10,000 resp.
According to the partnership deed, they were entitled to an interest on capital at 5% p.a.In addition, B was
also entitled to draw a salary of Rs 500 per month. C was entitled to a commission of 5% on the profits
after charging interest on capital but before charging salary payable to B. Net profit for the year was Rs
30,000 distributed in the ratio of capitals without providing for any of the above adjustments. The profits
were to be shared in the ratio of 5:2:3. Pass necessary adjustment entry showing the workings clearly.
8. Tushar and kapil were partners in a firm sharing profits in the ratio of 3:2. Their respective fixed capitals
were Rs 10,00,000 and Rs 15,00,000. The partnership deed provided the following:
(i) Interest on capital @ 10% p.a.
(ii) Interest on drawings @ 12% p.a.

During the year ended 31st March 2023 tushar’s drawings were Rs 10,000 per month drawn at the
end of every month and kapil’s drawings were Rs 20,000 per month drawn in the beginning of every
month. After preparation of final accounts for the year ended 31st march 2023, it was noticed that
interest on tushar’s drawings was not taken into consideration. Pass necessary journal entry.
9. Prakash, Karan and Rahim were partners sharing profits in the ratio of 3:2:1. Their capitals were Rs
5,00,000, Rs 3,00,000 and Rs 2,00,000 resp. as on 1st april 2023. According to the partnership deed, they
were entitled to interest on capital @ 10% p.a. For the year ended 31st march 2023, profit of Rs 78,000
was distributed among the partners without providing for interest on capitals. Pass necessary adjusting
entry.
10. P, Q and R are partners in a firm. Their capitals were Rs 3,00,000; Rs 1,50,000 and Rs 1,50,000 resp. on
1st april 2022.
As per provisions of the partnership deed:
(i) R was to be allowed remuneration of Rs 36,000 per annum.
(ii) Interest @ 5% p.a. was to be allowed on capital
(iii)Profits were to be distributed in the ratio of 2:2:1.
Ignoring the above items, net profit of Rs 1,80,000 for the year ended 31st march 2023 was
distributed among the three partners equally . Pass the journal entries to rectify the errors.