question_answer

X, Y and Z are partners sharing profits in the ratio of 5:3:2. As per the partnership deed interest on capital is allowed @4% p.a. After preparing accounts at the end, it was found that total Interest on capital Rs.41,000 was not allowed to the partners. To rectify the error, they passed an adjustment entry:

Date	Particulars		L.F.	Debit	Credit
	X's Capital A/c	Dr		3,500
	To Y's Capital A/c				2,700
	To Z's Capital A/c				800
	(Being error rectified)

Their opening capitals in the beginning were:

A) X Rs.4,00,000; Y Rs.3,00,000 and Z Rs. 1,00,000

B) X Rs.4,75,000; Y Rs.3,50,000 and Z Rs.2,50,000

C) X Rs.4,25,000; Y Rs.3,75,000 and Z Rs.2,25,000

D) X Rs.4,50,000; Y Rs.3,50,000 and Z Rs. 1,50,000