Question 9 Chapter 4 - Unimax Class 12 Part 1 - 2021

Question 9 Chapter 4 - Unimax Class 12 Part 1

9. A, B and C are three partners sharing Profits and Losses in ratio of 5 : 3 : 2. They decide to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2021. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book figures by passing a single adjusting entry.
General Reserve Rs. 24000
Profit and Loss A/c Rs. 6000 (Cr.)
Advertisement suspense A/c Rs. 12000 (Dr.)
You are required to pass the necessary single adjusting entry.

The solution of Question 9 Chapter 4 - Unimax Class 12 Part 1

Old Share	New Share	Difference
A 5/10	2/10	5/10-2/10=3/10 (Sacrifice)
B 3/10	3/10	3/10-3/10=0 (No change)
C 2/10	5/10	2/10-5/10=[3/10] (Gain)

Net Accumulated Profits = General Reserve + Profits & Loss A/c (Cr.) – Advertisement Suspense Account
                                        = Rs. 24000 + Rs. 6000 – Rs. 12000
                                        = Rs. 18000
C will pay to A Rs. 5400 ( 18000 x 3/10), on change in profit sharing ratio.

Journal

Date	Particulars		L.F.	Debit	Credit
April 1 2007	C’s Capital A/c	Dr.		5400
	To A’s Capital A/c				5400
	(Being adjustment entry Passed for treatment of accumulated profits and losses on change in constitution)

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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication