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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Soham, Ashish, Vishesh and Rashi were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2 : 1. With effect from 1st April, 2023, they decided to share profits and losses in the ratio of 2 : 1 : 1 : 1. Their Balance Sheet showed a General Reserve of ₹80,000. The goodwill of the firm was valued at ₹5,00,000. Pass the necessary Journal entries for the above on account of the change in the profit-sharing ratio. (CBSE 2024)
Sacrifice / (Gain): Soham = 4/10 – 2/5 = Nil; Ashish = 3/10 – 1/5 = 1/10 (Sacrifice); Vishesh = 2/10 – 1/5 = Nil; Rashi = 1/10 – 1/5 = –1/10 (Gain).
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2023 Apr 1 | General Reserve A/c Dr. | 80,000 | ||
| To Soham’s Capital A/c | 32,000 | |||
| To Ashish’s Capital A/c | 24,000 | |||
| To Vishesh’s Capital A/c | 16,000 | |||
| To Rashi’s Capital A/c | 8,000 | |||
| (General Reserve distributed in the old ratio 4 : 3 : 2 : 1) | ||||
| 2023 Apr 1 | Rashi’s Capital A/c Dr. (5,00,000 × 1/10) | 50,000 | ||
| To Ashish’s Capital A/c (5,00,000 × 1/10) | 50,000 | |||
| (Gaining partner Rashi compensating sacrificing partner Ashish for goodwill) |
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.20 - 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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