A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. Their fixed capitals were ₹ 4,00,000, ₹ 2,50,000 and ₹ 1,00,000 respectively

A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. Their fixed capitals were ₹ 4,00,000, ₹ 2,50,000 and ₹ 1,00,000 respectively. Net profit for the year ending 31st March, 2023 amounted to ₹ 2,20,000 which was distributed without providing for the following:

(i) Salary to B ₹ 5,000 p.m. and to C ₹ 10,000 per quarter.

(ii) Interest on capital @ 6% p.a.

(iii) Commission to Manager @ 10% on net profit after charging such commission.

Pass necessary rectifying entry.

Ans.

A’s Current A/c Dr. 42,000
To B’s Current A/c 9,000
To C’s Current A/c 13,000
To Manager’s Commission Outstanding A/c 20,000