Fewpal
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On 31st March, 2018 the balance in the Capital Accounts of Abhir; Bobby and Vineet, after making adjustments for profits and drawings were Rs. 8,00,000, Rs. 6,00,000 and Rs. 4,00,000 respectively.
 Subsequently, it was discovered that interest on capital and interest on drawings had been omitted. The partners were entitled to interest on capital @ 10% p.a. and were to be charged interest on drawings @ 6% p.a. The drawings during the year were : Abhir - Rs. 20,000 drawn at the end of each month, Bobby - Rs. 50,000 drawn at the beginning of every half year and Vineet - Rs. 1,00,000 withdrawn on 31st October, 2017. The net profit for the year ended 31st March, 2018 was Rs. 1,50,000. The profit sharing ratio was 2:2: 1.
 Pass necessary adjusting entry for the above adjustments in the books of the firm. Also, show your workings clearly.

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Statement Showing Adjustment to be made

Adjusting Journal Entry

Working Notes: 

Calculation of Opening Capital and Interest on Capital

Revised Profits = Given Profits + Interest on drawings – Interest on capitals 

= Rs. 1,50,000 + Rs. 13,600 – Rs. 2,09,000 

= Rs. 45,400 (Loss)

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