Solution
The partners of a firm, Alia, Bhanu and Chand distributed the profits for the year ended 31st March, 2017, Rs. 80,000 in the ratio of 3 : 3 : 2 without providing for the following adjustments: (a) Alia and Chand were entitled to a salary of Rs. 1,500 each p.a. (b) Bhanu was entitled for a commission of Rs. 4,000. (c) Bhanu and Chand had guaranteed a minimum profit of Rs. 35,000 p.a. to Alia any deficiency to borne equally by Bhanu and Chand. Pass the necessary Journal entry for the above adjustments in the books of the firm. Show workings clearly.