A and B sharing profits and losses in the ratio of 3 : 2 decide to admit C for 1/3rd share. On this date, their Balance Sheet disclosed the following items:
A and B sharing profits and losses in the ratio of 3 : 2 decide to admit C for 1/3rd share. On this date, their Balance Sheet disclosed the following items:
Show the accounting treatment in the following cases:
Case (i) If the market value of investments is ₹ 2,90,000
Case (ii) If the market value of investments is ₹ 2,45,000
Case (iii) If the market value of investments is ₹ 3,00,000
Case (iv) If the market value of investments is ₹ 3,25,000
[Ans.
Case (i) Capital Accounts of A and B credited by ₹ 30,000 in 3 : 2.
Case (ii) Capital Accounts of A and B debited by ₹ 15,000 in 3 : 2.
Case (iii) Capital Accounts of A and B credited by ₹ 40,000 in 3 : 2.
Case (iv) Capital Accounts of A and B credited by ₹ 40,000 + ₹ 25,000 in 3 : 2]
| Investment Fluctuation Reserve | 40,000 |
| Investments (at cost) | 3,00,000 |
Anurag Pathak Answered question August 29, 2024
