Problem 24:- The capitals of Mary and Tina at $6,000 and $ 4,000 respectively, after the necessary adjustment in respect of drawings and net profits for the year ending 31st December 2014. It was subsequently ascertained that 12% per annum interest each on capital and drawings were omitted to be recorded. Salary allowable to Mary $1,200 per annum was also not taken into account in arriving at the net profit. Net Profit was also divided in the ratio of 1:1 instead of 3:1. Mary withdraw regularly $100 per month in the beginning and Tina withdraw regularly $ 100 per month at the end of every month as drawings. The profits for the year as already divided amounted to $ 33,000. You are required to pass the adjusting entry.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Problem 24:-
The capitals of Mary and Tina at $6,000 and $ 4,000 respectively, after
the necessary adjustment in respect of drawings and net profits for the
year ending 31st December 2014. It was subsequently ascertained that
12% per annum interest each on capital and drawings were omitted to
be recorded. Salary allowable to Mary $1,200 per annum was also not
taken into account in arriving at the net profit. Net Profit was also
divided in the ratio of 1:1 instead of 3:1. Mary withdraw regularly $100
per month in the beginning and Tina withdraw regularly $ 100 per
month at the end of every month as drawings. The profits for the year
as already divided amounted to $ 33,000. You are required to pass the
adjusting entry.
Transcribed Image Text:Problem 24:- The capitals of Mary and Tina at $6,000 and $ 4,000 respectively, after the necessary adjustment in respect of drawings and net profits for the year ending 31st December 2014. It was subsequently ascertained that 12% per annum interest each on capital and drawings were omitted to be recorded. Salary allowable to Mary $1,200 per annum was also not taken into account in arriving at the net profit. Net Profit was also divided in the ratio of 1:1 instead of 3:1. Mary withdraw regularly $100 per month in the beginning and Tina withdraw regularly $ 100 per month at the end of every month as drawings. The profits for the year as already divided amounted to $ 33,000. You are required to pass the adjusting entry.
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education