On 31st March 2023, after the closing of the accounts, Capital Accounts of P, Q, and R stood in the books of the firm at ₹ 40,000; ₹ 30,000, and ₹ 20,000 respectively

On 31st March 2023, after the closing of the accounts, Capital Accounts of P, Q, and R stood in the books of the firm at ₹ 40,000; ₹ 30,000, and ₹ 20,000 respectively. Subsequently, it was noticed that interest on capital @ 5% had been omitted. Profit for the year ended 31st March 2023 was ₹ 60,000 and the partner’s drawings had been P – ₹ 10,000, Q – ₹ 7,500, and R – ₹ 4,500. The profit-sharing ratio of P, Q, and R is 3 : 2 : 1.

Pass necessary adjusting entry.

[Ans: Debit P’s Capital A/c by ₹ 300; Credit Q’s Capital A/c by ₹ 8 and R’s Capital A/c by ₹ 292]

[Hint: Opening Capital: P – ₹ 20,000; Q – ₹ 17,500; R – ₹ 14,500.]