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P, Q, and R who are presently sharing profits and losses in the ratio of 5 : 4 : 1, decide to share future profits & Losses equally. The Balance Sheet shows the General Reserve of ₹ 80,000 and the Profit and Loss Account (Dr. Balance) of ₹ 20,000. The adjustment entry to give effect to the above without disturbing balances of General Reserve and Profit & Loss A/c is:

P’s Capital A/c Dr. ₹ 10,000
Q’s Capital A/c Dr. ₹ 4,000
To R’s Capital A/c ₹ 14,000

b)

R’s Capital A/c Dr. ₹ 14,000
To P’s Capital A/c ₹ 10,000
To Q’s Capital A/c ₹ 4,000

c)

R’s Capital A/c Dr. ₹ 20,000
To P’s Capital A/c ₹ 10,000
To Goodwill A/c ₹ 10,000

d)

P’s Capital A/c Dr. ₹ 30,000
Q’s Capital A/c Dr. ₹ 30,000
To R’s Capital A/c ₹ 60,000

 

Anurag Pathak Changed status to publish May 7, 2023
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