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1.16 Double Entry Book Keeping (Section A)—ISC XII

ADJUSTMENT ENTRY
Date Particulars L.F. Dr. (`) Cr. (`)
Naman’s Current A/c ...Dr. 32,000
Akash’s Current A/c ...Dr. 16,000
To Vivek’s Current A/c 48,000
(Being the adjustment entry passed)

3. Current A/c Balances and Interest thereon: Vivek (`) Naman (`) Akash (`)
Given 1,00,000 80,000 (60,000)
Add/Less: Adjustment 48,000 (32,000) (16,000)
1,48,000 48,000 (76,000)
Interest on Current A/cs @ 10% p.a. 14,800 4,800 (7,600)
4. Divisible Profit = ` 7,48,575
Akash’s Share of Profit (Actual) = ` 1,66,350
Whereas, his Guaranteed Share of Profit = ` 2,00,000
Deficiency in Akash’s Share of Profit = ` 33,650, which will be met by Vivek and Naman equally.
Illustration 14.
Karan, Hari and Ashish commenced business on 1st April, 2015 as partners with capitals
of ` 2,00,000; ` 6,00,000 and ` 3,00,000. They mutually agreed for:

(i) 10% p.a. interest on capitals;
(ii) 15% p.a. interest on drawings;
(iii) Karan will get 5% commission on sales;

(iv) Hari will get ` 25,000 per month as salary; and
(v) Balance of profit to be distributed in the ratio of 2 : 2 : 1.

Ashish also provided a loan of ` 1,00,000 @ 16% p.a. to the firm.
Total sales during the first year (i.e., year ended 31st March, 2016) was ` 40,00,000 and
the net profit at the end of the year was ` 10,86,250 (after providing interest on loan).

During the year, Karan introduced ` 6,00,000 to the firm as additional capital on
30th September, 2015 but Hari withdrew ` 1,00,000 out of his capital on the same date.
Their drawings were:

Partners On 30th Jun., 2015 On 30th Sept., 2015 On 31st Dec., 2015
` ` `
Karan 50,000 90,000 1,00,000
Hari 80,000 80,000 80,000
Ashish 90,000 30,000 60,000
You are required to prepare Profit and Loss Appropriation Account for the year ended
31st March, 2016 and Partners’ Capital and Current Accounts.