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Answer

X, Y and Z who were sharing profits and losses in the ratio of 5 : 3 : 2 decided to share future profits in the ratio of 2 : 3 : 5. Given the Journal entry to distribute ‘Workmen Compensation Reserve’ of ₹ 1,20,000 at the time of change in profit sharing ratio, when there is a claim of ₹ 80,000 against it.

Solution:-

Anurag Pathak
April 29, 2023

A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of ₹ 1,20,000 at the time of change in profit sharing ratio, when: i) No other information is given ii) there is no claim against it.

Solution:- Case – 2 When there is no claim against the Workmen Compensation reserve, the entry would be the same as given

Anurag Pathak
April 29, 2023

Om and Shiv are partners in a firm sharing profits in the ratio of 4 : 1. They decided to share future profits in the ratio of 3 : 2 w.e.f 1st April, 2023. On that day, the Profit and Loss Account showed a debit balance of ₹ 1,00,000. Pass Journal entry to give effect to the above. [Ans.: Dr. Om’s Capital A/c by ₹ 80,000 and Shiv’s Capital A/c by ₹ 20,000; Cr. Profit and Loss A/c by ₹ 1,00,000.]

Solution:-

Anurag Pathak
April 29, 2023

Nitya and Anand are partners in a firm sharing profits and losses equally. With effect from 1st April 2023, they decided to share future profits in the ratio of 3 : 2. On the date of the change in the profit sharing ratio, the Profit & Loss Account had a credit balance of ₹ 1,50,000. Pass the necessary Journal entry for the distribution of the balance in the Profit & Loss Account before the change in the profit-sharing ratio.

Solution:-

Anurag Pathak
April 29, 2023

Naman, Aman and Raman are partners sharing profits and losses in the ratio of 2 : 2 : 1. From 1st April 2023, they decide to change the profit-sharing ratio. They pass the following adjustments entry for goodwill in the books:

Solution:-

Anurag Pathak
April 29, 2023

A, B and C shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April, 2023, they agreed to share profits equally. The goodwill of the firm was valued at ₹ 18,000.

Solution:-

Anurag Pathak
April 28, 2023

Hari, Ram and Shyam who were sharing profits and losses in the ratio of 5 : 3 : 2, decide to share future profits and losses in the ratio of 2 : 2 : 1. Goodwill of the firm is valued at ₹ 1,00,000. Goodwill existing in the books is ₹ 40,000. Show the necessary accounting treatment by raising Goodwill Account.

Solution:-

Anurag Pathak
April 28, 2023

Arun, Varun and Tarun are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to share profit and losses equally with effect from 1st April 2023. Goodwill of the firm is valued at ₹ 1,20,000. Pass Journal entries when goodwill is raised and written off.

Solution:-

Anurag Pathak
April 26, 2023

A and B are partners in a firm sharing profits in the ratio of 2 : 1. They decided that with effect from 1st April 2022, they would share profits in the ratio of 3 : 2. But, this decision was taken after the profit for the year ended 31st March 2023 of ₹ 90,000 was distributed in the old profit sharing ratio.

Solution:- Working Notes:-

Anurag Pathak
April 26, 2023

Ram, Laxman, and Bharat who were sharing profits and losses in the ratio of 5 : 3 : 2, decide to share profits and losses equally with effect from 1st April, 2023. The goodwill of the firm is valued at ₹ 4,50,000. Goodwill is appearing in the books is at ₹ 75,000. Pass necessary Journal entries to record the above change.

Solution:-

Anurag Pathak
April 26, 2023