Aman, Raj and Suresh were partners in a firm sharing profits and losses in the ratio of $\displaystyle 5$ : $\displaystyle 3$ : 8. Suresh was guaranteed a minimum profit of ₹ $\displaystyle 5,00,000$ per year. Any deficiency on this account was to be borne by Aman and Raj equally. The net profit of the firm for the year ended 31st March, $\displaystyle 2024$ was $\displaystyle 8,00$,000. Prepare Profit and Loss Appropriation Account of Aman, Raj and Suresh for the year ended 31st March, 2024.

OR

Jay and Vijay were partners in a firm sharing profits and losses in the ratio of $\displaystyle 7$ : 3. Their respective fixed capitals were ₹ $\displaystyle 9,00,000$ and ₹ $\displaystyle 7,00$,000. The partnership deed provided for interest on capital @ $\displaystyle 8$% per annum. After preparing the accounts for the year ended 31st March, $\displaystyle 2024$, it was discovered that interest on capital was allowed @ $\displaystyle 9$% per annum. Showing your workings clearly, pass the necessary journal entry to rectify the error.

In the books of Aman, Raj and Suresh Profit and Loss Appropriation A/c Dr. For the year ending $\displaystyle 31$ March, $\displaystyle 2024$ Cr. Particulars Amount(₹) Particulars Amount(₹) To Profit transferred to: By Profit and Loss A/c $\displaystyle 8,00,000$ Aman’s capital A/c $\displaystyle 2,50,000$ (Net Profit) $\displaystyle 1$ Less: Deficiency borne $\displaystyle (50,000)$ $\displaystyle 2,00,000$ ½ Raj’s capital A/c $\displaystyle 1,50,000$ Less: Deficiency borne $\displaystyle (50,000)$ $\displaystyle 1,00,000$ ½ Suresh’s capital A/c $\displaystyle 4,00,000$ Add: Deficiency recovered from Aman $\displaystyle 50,000$ Raj $\displaystyle 50,000$ $\displaystyle 5,00,000$ $\displaystyle 1$ $\displaystyle 8,00,000$ $\displaystyle 8,00,000$ Q.(b) Jay and Vijay were partners in a firm………………………. Ans. In the books of Jay and Vijay Journal Date Particulars L.F. Dr. Cr. Amount(₹) Amount(₹) $\displaystyle 2024$ April1 Vijay’s Current A/c Dr. $\displaystyle 2,200$ To Jay’s Current A/c $\displaystyle 2,200$ (Rectification entry for interest on capital provided at $\displaystyle 9$% instead of $\displaystyle 8$%) Working notes: Adjustment Table Particulars Jay(₹) Vijay(₹) Total(₹) $\displaystyle 1$% Excess Interest on capital taken back $\displaystyle 9,000$ Dr. $\displaystyle 7,000$ Dr. $\displaystyle 16,000$ Cr. Profit of ₹$\displaystyle 16,000$ distributed in the profit $\displaystyle 11,200$ Cr. $\displaystyle 4,800$ Cr. $\displaystyle 16,000$ Dr. sharing ratio $\displaystyle 7$:$\displaystyle 3$ Net Effect $\displaystyle 2,200$ Cr. $\displaystyle 2,200$ Dr. ------