Anju, Manju and Mamta are partners whose fixed capitals were Rs. 10,000, Rs. 8,000 and Rs. 6,000, respectively. As per the partnership agreement, there is a provision for allowing interest on capitals @ 5% p.a. but entries for the same have not been made for the last three years.
The profit sharing ratio during there years remained as follows:
Year |
Anju |
Manju |
Mamta |
2004 |
4 |
3 |
5 |
2005 |
3 |
2 |
1 |
2006 |
1 |
1 |
1 |
Make necessary and adjustment entry at the beginning of the fourth year i.e. Jan. 2007.