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

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)

• 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

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