A and B are partners in a firm with fixed capitals of and respectively. After preparing the final accounts, it was discovered that interest on capital @ as provided in the partnership deed was omitted. To rectify this error through an adjustment entry, A's Current Account should be:
- ACredited by
- BDebited by
- CCredited by
- DDebited by
Solution & Step-by-step Explanation
Let's calculate the missing entries using an adjustment table approach.Note: Since no profit-sharing ratio is mentioned, profits/losses are shared equally ().Calculate Interest on Capital due to partners:
Distribution of the resulting loss of equally:
Determine the Net Effect:For Partner A:
Thus, A's Current Account must be Debited by .
Distribution of the resulting loss of equally:
Determine the Net Effect:For Partner A:
Thus, A's Current Account must be Debited by .