Question 13 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 13 Chapter 4 of +2-A

Question 13 Chapter 4 of +2-A

13. 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, 2019. 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 .

  Book Values
General Reserve 6,000
Profit and Loss A/c (Credit) 24,000
Advertisement Suspense A/c  12,000

 

The solution of Question 13 Chapter 4 of +2-A

 

 

In the Books of _______________
Date Particulars
L.F. Debit Credit
2019          
April 1 Z’s Capital A/c Dr   5,400  
  X’s Capital A/c       5,400
  (Being Adjustment for General Reserve, Profit and Loss A/c and Advertisement Suspense account is made on change in profit sharing ratio.)      
           

 

Working Note :

 

Net Amount to be Adjustment = General Reserve + Profit and Loss A/c (Credit) +

Advertisement Suspense A/c

  = 6,000 + 24,000

12,000

  = 18,000      

 

Solution: –

Old Ratio of X, Y, & Z = 5 : 3 : 2 
New Ratio of X, Y, & Z = 2 : 3 : 5

Calculate the Sacrificing or Gaining Ratio of Partners
Sacrificing or Gaining Ratio = Old Ratio – New Ratio

 

Mandeep’s Sacrificing/Gaining Share = 5 2
10 10
    5- 2
  = 10
  = 3 Sacrificing
  10
Y’s Share Sacrificing/Gaining = 3 3
10 10
    3- 3
  = 10
  = Nil
Y’s Share Sacrificing/Gaining = 2 5
10 10
    2- 5
  = 10
  = (-)3 Gain
  10

 

Amount to be Credited to X’s Capital = 18,000 X 3
10
  = 5,400    

 

Amount of Goodwill Credited to X’s Capital = 18,000 X 3
10
  = 5,400    

 

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)

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

2 Book 1 min - Question 13 Chapter 4 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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