Question 19 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 19 Chapter 4 of +2-A

Question 19 Chapter 4 of +2-A

19. X and Y are partners sharing profits in the ratio of 2 : 1. On 31st March,
2019, their Balance Sheet showed General Reserve of 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2. Pass necessary Journal entry in each of the following alternative cases:

  1. When General Reserve is not to be shown in the new Balance Sheet.
  2. When General Reserve is to be shown in the new Balance Sheet.

 

The solution of Question 19 Chapter 4 of +2-A

In the case I – When General Reserve is not to be shown in the new Balance Sheet. 

In the Books of _______________
Date Particulars
L.F. Debit Credit
2019          
April 1 General Reserve A/c Dr   60,000  
  To X’s Capital A/c*1       40,000
  To Y’s Capital A/c*1       20,000
  (Being Adjustment for General Reserve)        
           

 

Working Note :

WN *1 Calculation of Share of General Reserve –

Amount to be Credited to X’s Capital = 60,000 X 2
3
  = 40,000    

 

Amount to be Credited to Y’s Capital = 60,000 X 1
3
  = 20,000    

 

In the case II – When General Reserve is to be shown in the new Balance Sheet

 

In the Books of _______________
Date Particulars
L.F. Debit Credit
2019          
April 1 Y’s Capital A/c*1 Dr   4,000  
  To X’s Capital A/c       4,000
  (Being Adjustment for General Reserve through Capital account)        

 

Working Note :

WN *2 Calculation of Share of General Reserve – 

Old Ratio of X, & Y = 2 : 1
New Ratio of X, & Y = 3 : 2

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

X’s Sacrificing/Gaining share  = 2  – 3
3 5
  = 10- 9
  15
  = 1  (Sacrificing)
  15
Y’s Share Sacrificing/Gaining = 1  – 2
3 5
  = 5 – 6
  15
  = – 1  Gaining
  15

 

 

Amount to be Credited to X’s Capital = 60,000 X 1
15
  = 4,000    

 

Amount to be Credited to Y’s Capital = 60,000 X 1
15
  = 4,000    

 

 

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 19 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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