sir,there is an entry to be ractified, goods taken byA,a partner,were taken as sales.parners charges 20%profit

Question

this is a pattnership firm and partners are a b c. i have to get p &l appropriation a/cof this firm on scrutiny two errors were found as(i)goods taken by A,one of the partners Rs.12000 were taken as sales.the partnership usually charges20% profit on cost.(ii)furniture discarded for Rs. 400 was not accounted for. instead it was shown as Rs.1200and depreciation@20%was charged.please solve the problem.

Answer 1

(i) First rectifying entry >>>>>
Reverse the original vouchers and pass fresh vouchers debiting A with Rs.10,000/ and crediting Purchase account with Rs.10,000/-. We presume that it was a trading firm. Purchase of (stocks will stand reduced) by Rs.10,000/- amount of stock taken away by A. Final impact will be profit will be reduced by Rs,2,000/- that margin of 20%.

(ii)Second rectifying entry>>>>>>>>
Further debit Profit & Loss A/c with Rs.1200/- to write off the furniture discarded. (20% depreciation and disposal amount of Rs.400/- has already been been taken care of).

Hope the above will serve your purpose.

Answer 2

Post a reverse entry by jv - Debit the Sales and Credit the partner
Make a new entry for the goods taken as A with a charge of of 20% profit on cost