U&I are partners sharing profits in 3:2. They decided to change this proportion to 2:3 from the previous two years. The profits for the year 2004-05 & 2005-06 were Rs.1,80,000 & Rs.2,60,000. However the profits were arrived upon without adjusting: Outstanding Rent Accrued Interest on Investment 2004-05 Rs.6,000 Rs.3,000 2005-06 Rs.8,000 Rs.7,000 Rent of previous year discharged & Accrued Interest realized in next year. Pass the adjustment entry. Hint: Debit U by Rs.88,400 & Credit I by Rs.87,400.]
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
![U & I are partners sharing profits in 3:2. They decided to change this proportion to 2:3 from the previous
two years. The profits for the year 2004-05 & 2005-06 were Rs.1,80,000 & Rs.2,60,000. However the
profits were arrived upon without adjusting:
Outstanding Rent
Accrued Interest on Investment
2004-05
Rs.6,000
Rs.3,000
2005-06
Rs.8,000
Rs.7,000
Rent of previous year discharged & Accrued Interest realized in next year. Pass the adjustment entry.
[Hint: Debit U by Rs.88,400 & Credit I by Rs.87,400.]
racticing independently at Madras and Bangalore respectively and](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3620711c-e1f1-4fcd-a3c5-b0fec6699bec%2Fd44541d2-c663-4427-abb4-0239404af268%2Faawc4ii_processed.jpeg&w=3840&q=75)
Step by step
Solved in 3 steps with 7 images
