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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A, B and C, who are presently sharing profits and losses in the ratio of 5 : 3 : 2, decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the Journal entry to distribute the ‘Investments Fluctuation Reserve’ of ₹20,000 at the time of change in profit-sharing ratio, when investments (market value ₹95,000) appear in the books at ₹1,00,000.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Investments Fluctuation Reserve A/c Dr. | 5,000 | |||
| To Investments A/c | 5,000 | |||
| (Fall in the value of investments ₹1,00,000 – ₹95,000 met out of the reserve) | ||||
| Investments Fluctuation Reserve A/c Dr. | 15,000 | |||
| To A’s Capital A/c | 7,500 | |||
| To B’s Capital A/c | 4,500 | |||
| To C’s Capital A/c | 3,000 | |||
| (Balance of the reserve distributed in the old ratio 5 : 3 : 2) |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 3 Q.17 - Change in Profit-Sharing Ratio Among the Existing Partners", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 3 - Change in Profit-Sharing Ratio Among the Existing Partners.
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