Multiple Choice Questions on P Q and R are partners in a firm sharing profits and losses in the ratio of 2 1 2 Their fixed c........... for Commerce 12th Preparation

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Multiple Choice Questions

P Q and R are partners in a firm sharing profits and losses in the ratio of 2 1 2 Their fixed c...........

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    P, Q and R are partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. Their fixed capitals were rs 3,00,000, rs 1,00,000 and 2,00,000 respectively. Interest on capital for the year ending 31st  March, 2018 was credited to them @9% p.a. instead of 10% p.a. The profit for the year before charging interest was 2,50,000. In the adjustment entry, Q's Current Account will be debited by:

    rs200

    Correct Answer

    rs400

    Incorrect Answer

    rs600

    Incorrect Answer

    rs 800

    Incorrect Answer
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    Explanation:

    - The fixed capitals for P, Q, and R are Rs 3,00,000, Rs 1,00,000, and Rs 2,00,000, respectively.

    - Interest at 9% was wrongly credited instead of 10%.

    - Correct interest at 10% should be Rs 30,000 for P, Rs 10,000 for Q, and Rs 20,000 for R.

    - Interest already credited at 9% is Rs 27,000 for P, Rs 9,000 for Q, and Rs 18,000 for R.

    - The shortfall is Rs 3,000 for P, Rs 1,000 for Q, and Rs 2,000 for R.

    - Q needs Rs 200 more (Rs 1,000 - Rs 800 already debited from profit share).

    - Correct Option: Option 1 - Rs 200

    .

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