question_answer

Palak, Geetika and Sarvesh are partners. They have omitted interest on capital @ 10% per annum for three years ended 31st March, 2017. Their fixed capitals on which interest was to be calculated throughout were : Rs. 10,000, Rs. 8,000 and Rs. 7,000 respectively. Their profit sharing ratio were 2015 - 1 : 2 : 2; 2016 - 5 : 3 : 2 and 2017 -  4 : 5 : 1. The firm earned profit of Rs. 2,500 in each year. They decided to donate blankets, woollen clothes and medicines to an Old Age Home. Give the necessary adjusting journal entries and identify the value being conveyed in the question.

Answer:

Geetika (Dr) = Rs. 600, Palak (Cr) = Rs. 250, Sarvesh (Cr) = Rs. 350