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Question 26 Chapter 4 of +2-Part-1
26. (Adjustment of Capital) A, B and C were partners, sharing profits and losses in 4:3:2 ratio respectively. They changed their profit sharing ratio to 2:4:3. On 31st March 2018, when their capitals after necessary adjustments stood at Rs.39,300; Rs.39,600 and Rs.18,300 respectively. The entire capital of the newly constituted firm is fixed at Rs.1,08,000 as per new profit sharing ratio. Calculate the actual cash to be paid off or to be brought in by the partners and pass necessary journal entries.
Total capital of Reconstituted Firm = Rs.1,08,000
| Particular |
A | B | C | |
|---|---|---|---|---|
| New profit sharing ratio = 2:4:3 | ||||
| A’s Capital (1,08,000*2/9) | 24,000 | - | - | |
| B’s Capital (1,08,000*4/9) | - | 48,00 | - | |
| C’s Capital (1,08,000*3/9) | - | - | 36,000 | |
(ii) Calculation of cash to be brought in or paid off to partners:
| Particular |
A | B | C | |
|---|---|---|---|---|
| Partners’ capitals in Reconstituted firm | 24,000 | 48,000 | 36,000 | |
| Existing capitals of partners | 39,300 | 39,600 | 18,300 | |
| Cash to be brought/paid off | (15,300) | (8,400) | (17,700) | |
| C’s Capital (1,08,000*3/9) | Paid off | Brought | Brought | |
Journal
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| (i) | A’s Capital a/c | Dr. | 15,300 | ||
| To Cash a/c | 15,300 | ||||
| (Being excess capital withdrawn by partner) | |||||
| (ii) | Cash a/c | Dr. | 26,100 | ||
| To B’s Capital a/c | 8,400 | ||||
| To C’s Capital a/c | 17,700 | ||||
| (Being shortage in the capital brought in by partners) | |||||
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Economics Educator
Mrs. Dilgeerjot Kaur holds a B.Com and M.Com degree and has over 9 years of teaching experience in microeconomics, macroeconomics, and business economics.
This guide covers "Question 26 Chapter 4 of +2 Part-1 - USHA Publication 12 Class Parat - 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication +2 Part 1.
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