U&I are partners sharing profits in 3:2. They decided to change this proportion to 2:3 from the previous two years. The profits for the year 2004-05 & 2005-06 were Rs.1,80,000 & Rs.2,60,000. However the profits were arrived upon without adjusting: Outstanding Rent Accrued Interest on Investment 2004-05 Rs.6,000 Rs.3,000 2005-06 Rs.8,000 Rs.7,000 Rent of previous year discharged & Accrued Interest realized in next year. Pass the adjustment entry. Hint: Debit U by Rs.88,400 & Credit I by Rs.87,400.]

U&I are partners sharing profits in 3:2. They decided to change this proportion to 2:3 from the previous two years. The profits for the year 2004-05 & 2005-06 were Rs.1,80,000 & Rs.2,60,000. However the profits were arrived upon without adjusting: Outstanding Rent Accrued Interest on Investment 2004-05 Rs.6,000 Rs.3,000 2005-06 Rs.8,000 Rs.7,000 Rent of previous year discharged & Accrued Interest realized in next year. Pass the adjustment entry. Hint: Debit U by Rs.88,400 & Credit I by Rs.87,400.]

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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