ILLUSTRATION 3. A and B are partners sharing profits in the ratio of 5 : 3. Following is the Balance Sheet of the Firm on 31-3-2015 : BALANCE SHEET as at 31-3-2015 Liabilities $ Assets Capital : A Drawings 80,000 20,000 5,000 3,000 92,000 A B В Other Assets 1,00,000 1,00,000 Profit for the year 2014-15 was $ 16,000 and was divided between the Partners as per agreed ratio, but interest on capital @ 5% p.a. and on drawings @ 6% was inadvertently omitted. Interest on drawings may be calculated on an average basis for 6 months. You are required to pass Journal Entry(ies)to make the adjustments in the Capital Accounts of A and В.

ILLUSTRATION 3. A and B are partners sharing profits in the ratio of 5 : 3. Following is the Balance Sheet of the Firm on 31-3-2015 : BALANCE SHEET as at 31-3-2015 Liabilities $ Assets Capital : A Drawings 80,000 20,000 5,000 3,000 92,000 A B В Other Assets 1,00,000 1,00,000 Profit for the year 2014-15 was $ 16,000 and was divided between the Partners as per agreed ratio, but interest on capital @ 5% p.a. and on drawings @ 6% was inadvertently omitted. Interest on drawings may be calculated on an average basis for 6 months. You are required to pass Journal Entry(ies)to make the adjustments in the Capital Accounts of A and В.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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