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

See similar textbooks

Similar questions

The following were the balances of the partnership between Crayon and Pencil as at 31 Question 2 December 2009: DR Capital on 2 January 2009 Crayon Pencil CR 30 000 30 000 Current accounts on 1 January 2009 Crayon Pencil 1 500 200 Drawings during the year Crayon Pencil 6 000 4 400 .160 000 Land and building... Equipment... Cash and bank... .15 000 ..20 000 Bank loan.... .90 000 ..1 400 .40 000 Electricity.. Office salaries.... Advertising.. Bad debts.... .30 000 ... 700 Provision for bad debts.. 700 Debtors.... ...6 000 Creditors.... Provision for depreciation: equipment... Stock on 31 December 2009..... Gross profit for the year.... .9 500 ..2 000 .30 000 ..150 000 Additional information available includes: i. The provision for bad debts is to be increased by $50 ii. The amount of advertising includes a payment of $120 for 2004 iii. There is an electricity bill of $145 due iv. Equipment is to be depreciated at 20% on cost per annum v. Interest on capital is allowed at 20% per annum…
ILLUSTRATION 37:-X, Y and Z were partners sharing profits and losses in the ratio 2 : 2 : 1. Their respective capital balances on 31.12.2014 were $ 5,00,000, $ 6,00,000 and $ 4,00,000 respectively. After closing the accounts for the year 2014, it was discovered that salaries of $ 20,000 p.a. to X and $ 30,000 to Z were ommited before distributing the profit. Profits for the year 2014 were $ 5,00,000 and the same have already been credited to their capital accounts. Instead of changing the audited Balance sheet, it was decided to pass a single adjusting entry in the beginning of the year 2015, so that accounts of previous year can be rectified.
A partner had a debit balance on his current account of $1600 on 1 January 2009. On 31 December 2009 the following amounts were entered in the partner’s current account: interest on capital $500 share of profit $4000 What was the balance on the partner’s current account on 1 January 2010? A credit $1900 B credit $2900 C debit $5100 D debit $6100
The A & B Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (C). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (C), are as follows: Partner (A) (30%) $63,000 Partner (B) (70%) $97,000 Partner (C) invested $120,000 cash to the partners for 60% of capital interest and the partners agree about assets revaluation. The capital balance of partner B after admission is a. $82,000. a. $82,000. b. $78,000. b. $78,000. c. $91,000. c. $91,000. d. $97,000.
Two partners Tom and Jerry have the following details of their accounts for the year ended 31 December 2021. Capital accounts: Current accounts: Salaries: Drawings: Profit sharing ratio: Net profit before appropriation £100,000 £ Tom 8,000 3,000cr 10,000 25,000 3 £ Jerry 6,000 1,000 dr 30,000 30,000 1 Required: Prepare the relevant income statement and statement of financial position extracts.
Since 1s* January, 2011 A,B and C are equal partners. Their Balance Sheet as on 31-12-2014 is as follows: Liabilities Assets 40,000 Cash in hand Cash at Bank 60,000 Sundry Debtors Stock in Trade Plant & Machinery Land & Building Sundry Creditors Accumulated Balance in 15,000 25,000 40,500 24,500 Profit & Loss A/c Capital Accounts : 40,000 40,000 20,000 |1,00,000 |2,00,000 A 35,000 60,000 |2,00,000 (1) Accumulated balance in Profit and Loss Account as given in the Balance Sheet consists of the following: Profit of 2012 3 36,000, Loss of 2013 3 18,000, and Profit of 2014 3 42,000. Analysis of the books of accounts disclosed the following errors : (a) A machinery costing $ 12,000 purchased in 2013 was debited to Repairs Account. 10% depreciation on reducing balance method is provided on plant and machinery. (b) $1,080 being the fixed deposit interest due to the firm used by A for his personal (11) expenses in 2014. (c) Goods costing $ 12,000 gent on sale or return basis have been recorded…
Accounting Question
14. On December 31, 2015, the statement of financial position of JMR Partnership is presented below: Assets, at cost 180,000 JJ, loan JJ, capital мм, саpital RR, capital Total 10,000 45,000 40,000 85,000 180,000