71 :- Mannu and Shrishti are partners in a firm sharing profits in the ratio of 3 : 2. Following information is of the firm as on 31st March 2025:
Profit for the year ended 31st March, 2025 was Rs 50,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently omitted. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.
Solution:-
WORKING NOTES :-
(a) Calculation of Interest on Mannu’s capital
Opening capital of Mannu = Closing capital – Profit
= 3,00,000 – 30,000
= Rs 2,70,000
Interest on Manu’s capital = 2,70,000 x 5/100 = Rs 13,500
(b) Calculation of Interest on Shrishti’s capital
Opening capital of Shristi = Closing capital – Profit
= 1,00,000 – 20,000
= Rs 80,000
Interest on Shrishti’s capital = 80,000 x 5/100 = Rs 4,000
(c) Calculation of Interest on partner’s drawings
Interest on Mannu’s drawings = 40,000 x 6/100 x 6/12
= Rs 1,200
Interest on Shrishti’s drawings = 20,000 x 6/100 x 6/12
= Rs 600