a) An extract of the Balance Sheet of Murari and Vohra sharing profits and losses in the ratio of 3 : 2 was as under:
a) An extract of the Balance Sheet of Murari and Vohra sharing profits and losses in the ratio of 3 : 2 was as under:
| Liabilities | ₹ | Assets | ₹ |
| General Reserve
Contingency Reserve Profit & Loss A/c Investment Fluctuation Reserve Workmen Compensation Reserve Employees Provident Fund |
30,000
2,700 18,000 9,000 7,200 20,000 |
Investment (Market Value ₹ 1,14,000)
Advertisement Expenditure (Deferred Revenue) |
1,20,000
6,000 |
New Partner Krishna was admitted for 1/5th share of profits. A claim on account of Workmen Compensation Reserve is estimated for ₹ 900.
Pass the necessary Journal entries to adjust accumulated profits and losses.
b) A, B and C were partners sharing profits and losses in the ratio 0f 6 : 3 : 1. They take D into partnership with effect from 1st April, 2023. The new profit sharing ratio between A, B and C and D will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing an adjusting entry:
| General Reserve
Contingency Reserve Profit & Loss A/c (Cr.) Advertisement Suspense A/c (Dr.) |
₹ 1,50,000
60,000 90,000 1,20,000 |
Pass the necessary adjustment entry through the Partner’s Current Account.
Anurag Pathak Changed status to publish May 23, 2023
