0

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
Add a Comment