The partners of a firm distributed the profits for the year ended 31st March, 2024, ₹ 1,50,000 in the ratio of 2 : 2 : 1. without providing for the following adjustments

The partners of a firm distributed the profits for the year ended 31st March, 2024, ₹ 1,50,000 in the ratio of 2 : 2 : 1. without providing for the following adjustments:

(i) A and B were entitled to a salary of ₹ 1,500 per quarter.

(ii) C was entitled to a commission of ₹ 18,000.

(iii) A and C had guaranteed a minimum profit of ₹ 50,000 p.a. to B.

(iv) Profits were to be shared in the ratio of 3 : 3 : 2.

Pass necessary journal entry for the above adjustments in the books of the firm.

Ans.

A’s Capital A/c Dr. 12,000
B’s Capital A/c Dr. 4,000
To C’s Capital A/c 16,000