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A, B, and C were partners. Their fixed Capitals were ₹ 60,000, ₹ 40,000, and ₹ 20,000 respectively. Their profit-sharing ratio was 2 : 2 : 1. According to the Partnership Deed, they were entitled on capital @ 5% p.a. In addition, B was also entitled to draw a salary of ₹ 1,500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profits for the year, ₹ 80,000, were distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings clearly, pass the necessary adjustment entry. [CBSE 2019]

[Ans.: Dr. A’s Current A/c by ₹ 16,080; Cr. B’s Current A/c by ₹ 14,253 and C’s Current A/c by ₹ 1,827.]

[Hint: C’s Commission = 5/100 × ₹ 74,000 [i.e., ₹ 80,000 – ₹ 6,000 (Interest on Capital)] = ₹ 3,700]

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