Question 61:

Mohan, Suhaan and Adit were partners in a firm sharing profits and losses in the ratio of 3:2:1. Their fixed capitals were: ₹ 2,00,000, ₹ 1,00,000 and ₹ 1,00,000 respectively. For the year ended 31st March, 2023, interest on capital was credited to their accounts @ 8% p.a. instead of 5% p.a.

Pass necessary adjusting Journal entry. Show your workings clearly. (CBSE 2025)

Answer:

Interest on capital was credited to their accounts @ 8% p.a. instead of 5% p.a., 3% in excess was to be distributed in profit sharing ratio of 3:2:1.

Adjustment Table

Question 62:

Ram, Mohan and Sohan were partners sharing profits in the ratio of 2:1:1. Ram withdrew ₹3,000 every month and Mohan withdrew ₹4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings.

Showing your working clearly, pass the necessary adjustment entry to rectify the error.

Answer:

Working notes:

WN1:

Table of Adjustments

WN2: Interest on Drawing Wrongly Debited

Ram’s Interest on Drawing= 36,000×6/100×6/12=1,080

Sohan’s Interest on Drawing= 48,000×6/100×6/12=1,440

WN3:Profits to be credited (1,080+1,440=2,120)

Ram =  2,520×2/4=1,260

Mohan =2,520×1/4=630

Sohan = =2,520×1/4=630

Question 63:

Simrat and Bir are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2026 after closing the books of account, their Capital Accounts stood at  ₹ 4,80,000 and  ₹ 6,00,000 respectively. On 1st May, 2025, Simrat introduced an additional capital of  ₹ 1,20,000 and Bir withdrew  ₹ 60,000 from his capital.On 1st October, 2025, Simrat withdrew  ₹ 2,40,000 from her capital and Bir introduced  ₹ 3,00,000. Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% p.a. had been omitted. Profit for the year ended 31st March, 2026 amounted to  ₹ 2,40,000 and the partners' drawings had been: Simrat –  ₹ 1,20,000 and Bir –  ₹ 60,000.

Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating.

Answer:

Case 1: If Capitals are fixed:

Calculation of Interest on Capital

Interest on Capital Simrat=(6,00,000×6×1/100×12)+(7,20,000×6×5/100×12)+(4,80,000×6×6/100×12)=35,400

Interest on Capital Bir=(3,60,000×6×1/100×12)+(3,00,000×6×5/100×12)+(6,00,000×6×6/100×12)=27,300

Working Notes:

WN1: Calculation of Opening Capital:

Case2: If Capitals are Fluctuating:

Calculation of Interest on Capital

Interest on Capital Simrat=(5,76,000×6×1/100×12)+(6,96,000×6×5/100×12)+(4,56,000×6×6/100×12)= 33,960

Interest on Capital Bir=(3,24,000×6×1/100×12)+(2,64,000×6×5/100×12)+(5,64,000×6×6/100×12)= 25,140

Working Notes:

WN1: Calculation of Opening Capital:

Question 64:

Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3. Their Capital Accounts as on 1st April, 2015 showed balances of  ₹ 1,40,000 and  ₹ 1,20,000 respectively. The drawings of Mita and Usha during the year 2015-16 were  ₹ 32,000 and  ₹ 24,000 respectively. Both the amounts were withdrawn on 1st January 2016. It was subsequently found that the following items had been omitted while preparing the final accounts for the year ended 31st March, 2016:
(a) Interest on Capital @ 6% p.a.
(b) Interest on Drawings @ 6% p.a.
(c) Mita was entitled to a commission of  ₹ 8,000 for the whole year.
Showing your working clearly, pass a rectifying entry in the books of the firm.

Answer:

Question 65:

A, B and C were partners. Their fixed capitals were ₹60,000, ₹40,000 and ₹20,000 respectively. Their profit sharing ratio was 2 :2 : 1. According to the Partnership Deed, they were entitled to interest on capital @ 5% pa. In addition, B was also entitled to draw a salary of ₹1,500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profits for the year, ₹80,000, were distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings clearly, pass the necessary adjustment entry. (CBSE 2019)

Answer;