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Ask QuestionPosted by Mansi Srivastava 6 years, 3 months ago
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Himanshu Garg 6 years, 3 months ago
Posted by Bharat Mukhiya 6 years, 3 months ago
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Piyush Patel 6 years, 3 months ago
Sakshi Talwar 6 years, 3 months ago
Himanshu Garg 6 years, 3 months ago
Yogita Ingle 6 years, 3 months ago
Depreciation of domestic currency refers to decrease in the value of domestic currency in terms of foreign currency. For example, if the price of $1 increases from Rs 55 to Rs 59. It means fall in the price of domestic currency.
Posted by All In One 6 years, 3 months ago
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Mansi Srivastava 6 years, 3 months ago
Posted by Defia Sympli 6 years, 3 months ago
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Priya Singla 6 years, 3 months ago
Posted by Tikshika Kumari 6 years, 3 months ago
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Sia ? 6 years, 3 months ago
Adjusting Journal Entry
| Date | Particulars | L/F |
Amount (Dr) |
Amount (Cr) |
|
| C's Capital A/c | Dr | 6,720 | |||
| To A's Capital A/c(Being the necessary adjustment entry passed) | 6,720 |
Working Note
Adjustment table
| Particulars |
A (Rs) |
B (Rs) |
C (Rs) |
Total (Rs) |
|
| I. | Amount to be Credited Interest on Capital @ 6% |
14,880 | 8,160 | 1,440 | 24,480 |
| II. | Amount to be Debited | ||||
| Rs 24,480 in Profit Sharing Ratio i.e., 1:1:1 | 8,160 | 8,160 | 8,160 | 24,480 | |
| III. | Net Effect (I - II) | 6,720 (Cr) | ------- | 6,720 (Dr) | -------- |
Calculation of Opening Capitals and Interest:Interest on capital is allowable only if there is enough profits to cover it up otherwise not as well as it should be cleared to all that partners shall not be entitled any interest on capital, unless specifically given or written in the partnership agreement. Interest on capital introduced by the partners is calculated on the basis of time of contribution and it should also be considered the introduction of fresh capital by any partner as well as drawings made by the partners. It is important to note here that, the interest on capital provided to a partner is a compensation given to him for his/her investment in the firm foregoing the alternative risk free/risky investment available with even higher return. Interest on capital is necessary to partners because they always not share the profit on the basis of capital contribution ratio rather sometime equally even through the capital contribution is unequal. So, it equalizes the weight to maintain a parity the interest on capital plays a vital role among partners.
Opening Capital = Closing Capital + Drawings - Share of Profits
Accordingly, opening capital of
A = 4,00,000 + (4,000 {tex}\times{/tex} 12) - (6,00,000 {tex}\times \frac 13{/tex}) = Rs 2,48,000
B = 3,00,000 + (3,000 {tex}\times{/tex} 12) - (6,00,000 {tex}\times \frac 13{/tex}) = Rs 1,36,000
C = 2,00,000 + (2,000 {tex}\times{/tex} 12) - (6,00,000 {tex}\times \frac 13{/tex}) = Rs 24,000
Interest on Capital = A = 2,48,000 {tex}\times \frac{6}{100}{/tex} = Rs 14,880
B = 1,36,000 {tex}\times \frac{6}{100}{/tex} = Rs 8,160
C = 24,000 {tex}\times \frac{6}{100}{/tex} = Rs 1,440
Values highlighted in the above question are:
- Development of remote tribal area, by providing employment opportunities.
- Equity, even though capital contributions are unequal, still the partners are sharing profits equally, thereby promoting harmony and brotherhood.
Posted by Dr.Rakesh Chaturvedi 6 years, 3 months ago
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Posted by Àñkesh Kumar Shah 6 years, 3 months ago
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Cheshta Rawat 6 years, 3 months ago
Posted by Aswanth Eswar 6 years, 3 months ago
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Posted by Goutam Gupta 6 years, 3 months ago
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Kritika Shekhawat 6 years, 3 months ago
Shreya Kumari 6 years, 3 months ago
Shreya Kumari 6 years, 3 months ago
Posted by Ankit Sharma 6 years, 3 months ago
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Yogita Ingle 6 years, 3 months ago
Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. Hence, subsidies are treated as revenue expenditure as they do not reduce the liability of the government and do not add to the assets of the government.
Posted by Jasmine Sharma 6 years, 3 months ago
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Jasmine Sharma 6 years, 3 months ago
Karan Varshney 6 years, 3 months ago
Posted by Ritika Malik 6 years, 3 months ago
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Posted by Ritika Malik 6 years, 3 months ago
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Goutam Gupta 6 years, 3 months ago
Posted by Himanshu Yadav 6 years, 3 months ago
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Posted by Gurpreet Singh Guri 6 years, 3 months ago
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Tanmay Goyal 6 years, 3 months ago
Posted by Shayan Burhan 6 years, 3 months ago
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Yogita Ingle 6 years, 3 months ago
Gaining ratio is calculated at the time of retirement or death of a partner. It is the ratio in which the remaining partners acquire the outgoing partner’s share of profit.
When the partner retires, the profit sharing ratio of the continuing partners gets changed. Continuing partners distribute the share of retiring partner among them.
Gaining ratio= New Ratio – Old Ratio (if positive)
Posted by Saksham Jain 6 years, 3 months ago
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Himanshu Garg 6 years, 3 months ago
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Rohan Rajak 6 years, 3 months ago
Posted by Enjoy Life 6 years, 3 months ago
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Ashok Gaur 6 years, 3 months ago
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J.S Pluss 5 years, 6 months ago
6Thank You