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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
X, Y and Z are sharing profits and losses in the 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, 2025. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry: General Reserve ₹6,000; Profit & Loss A/c (Credit) ₹24,000; Advertisement Suspense A/c ₹12,000. Pass an adjustment entry.
Net accumulated profit = General Reserve ₹6,000 + Profit & Loss A/c ₹24,000 – Advertisement Suspense ₹12,000 = ₹18,000 (net credit).
Sacrifice / (Gain): X = 5/10 – 2/10 = 3/10 (Sacrifice); Y = 3/10 – 3/10 = Nil; Z = 2/10 – 5/10 = –3/10 (Gain). Adjustment = ₹18,000 × 3/10 = ₹5,400.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2025 Apr 1 | Z’s Capital A/c Dr. | 5,400 | ||
| To X’s Capital A/c | 5,400 | |||
| (Adjustment of accumulated profits, losses and reserves in the sacrificing / gaining ratio) |
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.23 - 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.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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