Question 17 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 17 Chapter 4 of +2-A

Question 17 Chapter 4 of +2-A

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
2019          
April 1 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)

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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2 Book 1 min - Question 17 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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