[ISC] Q. 78 solution of Fundamentals of Partnership Firms TS Grewal Book ISC 2023-24 Edition

Solution of Question number 78 of the Fundamentals of Partnership Accounts (Firm) chapter TS Grewal Book 2023-24 Edition ISC Board.

Alex, John, and Sam are partners in a firm. Their capital accounts on 1st April 2015, stood at ₹ 1,00,000; ₹ 80,000, and ₹ 60,000 respectively.

Each partner withdrew ₹ 5,000 during the financial year 2015 – 16.

As per the provisions of their partnership Deed:

(a) John was entitled to a salary of ₹ 1,000 per month.

(b) Interest on capital was to be allowed @ 10% per annum.

(c) Interest on drawings was to be charged @ 4% per annum.

(d) Profits and losses were to be shared in the ratio of their capitals.

The net profit of ₹ 75,000 for the year ended 31st March 2016, was divided equally among the partners without providing for the terms of the deed.

You are required to pass a Single Adjustment Journal Entry to rectify the error. (Show the workings clearly).

Solution

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