Sita, Geeta and Meena are partners in a firm. On 1st April 2023, their fixed capitals stood at 7,50,000,3,75,000 and - 3,75,000 respectively. As per…
CA Foundation · Accounting · MTP · January 2026
Sita, Geeta and Meena are partners in a firm. On 1st April 2023, their fixed capitals stood at 7,50,000,3,75,000 and - 3,75,000 respectively. As per the provisions of the partnership deed: 1. Meena was entitled to a salary of 75,000 p.a. 2. All the partners were entitled to interest on capital at 5% p.a. 3. Profits and losses were to be shared in the ratio of the capitals of the partners. Net Profit for the year ended 31st March 2024 of 4,95,000 and 31st March 2025 of 6,75,000 was divided equally without providing for the above adjustments. You are required to pass an adjustment journal entry to rectify the above errors .
Suggested Answer and Working Notes:
Cash and Bank Account Debit Credit Particulars Cash (₹) Bank (₹) Particulars Cash (₹) Bank (₹) To Balance b/d 10,000 By Balance b/d 50,000 To Sales (bal. fig) 2,40,000 By Bank A/c (C) 1,00,000 To Cash (C) 1,00,000 By Salaries 40,000 To Debtors 7,50,000 By Creditors 20,000 7,00,000 To Vimal’s loan 1,00,000 By Drawings 80,000 By Business expenses 1,20,000 By Balance c/d 10,000 80,000 Total 2,50,000 9,50,000 Total 2,50,000 9,50,000
Topics: Retirement of a Partner
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