Q16 :-A,B and C were partners sharing profits and losses equally. Their respective capitals were $30,000, $ 20,000 and $ 10,000. After closing the accounts for the year 2014-15, it was discovered that the interest on capital at the rate 10%p.a. was omitted before distributing the profits. Instead of changing the audited balance sheet it was decided to pass a single adjusting entry in the beginning of the year, so that the accounts of the previous years can be rectified. Show journal entries.
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.
Step by step
Solved in 2 steps with 2 images
