Question 17 Chapter 4 of +2-A - T.S. Grewal 12 Class Part

Question 17 Chapter 4 of +2-A

Table of Contents

The solution of Question 17 Chapter 4 of +2-A

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

17. 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 Investments Fluctuation Reserve’ of 20,000 at the time of change in profit-sharing ratio, when investment market value 95, 000 appears in the books at 1,00,000.

The solution of Question 17 Chapter 4 of +2-A

In the Books of _______________
Date	Particulars		L.F.	Debit	Credit

	Investment Fluctuation Reserve A/c	Dr		5,000
	To Investments A/c				5,000
	(Being Adjustment for Workmen Compensation Reserve.)
	Investment 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
	(Being Adjustment for Investment Fluctuation Reserve)

Working Note :

Calculation of Share of Investment Fluctuation Reserve

Amount to be credited to A’s Capital	=	15,000	X	5
				10
	=	7,500

Amount to be credited to B’s Capital	=	15,000	X	3
				10
	=	4,500

Amount to be credited to C’s Capital	=	15,000	X	2
				10
	=	3,000

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. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

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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