# Question 24 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 24 Chapter 4 of +2-A

24. A, B and C are sharing profits and losses in the ratio of 2 : 2 : 1. They decided to share profit w.e.f. 1st April, 2019 in the ratio of 5 : 3 : 2. They also decided not to change the values of assets and liabilities in the books of account. The book values and revised values of assets and liabilities as on the date of change were as follows:

 Book values Revised values Machinery 2,50,000 3,00,000 Computers 2,00,000 1,75,000 Sundry Creditors 90,000 75,000 Outstanding Expenses 15,000 25,000

Pass an adjustment entry

The solution of Question 24 Chapter 4 of +2-A

 In the Books of _______________ Date Particulars L.F. Debit Credit 2019 April 1 A’s Capital A/c Dr 10,000 To B’s Capital A/c*1 50,000 (Being adjustment make for the revaluation of assets and liabilities)

Working Note :

 Old Ratio of X, & Y = 2 : 2 : 1 New Ratio of X, & Y = 5 : 3 : 2

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

 A’s Share Sacrificing/Gaining = 2 – 5 5 10
 = 20 – 25 50
 = 5 (Sacrificing) 50

 B’s Share Sacrificing/Gaining = 2 – 2 5 10
 = 20 – 15 50
 = 5 Sacrifice 50
 C’s Share Sacrificing/Gaining = 1 – 2 5 10
 = 10- 10 50 = Nil

Calculation of Profit or Loss on Revaluation

 Revaluation A/c Particulars Amount Particulars Amount To Computers A/c 25,000 By Machinery A/c 50,000 To Outstanding expenses A/c 10,000 By Creditors A/c 15,000 To Profit on Revaluation 30,000 65,000 65,000

WN *1 Adjustment of Profit on revaluation of in the sacrificing and gaining share: –

 Amount to be Credited to A’s Capital = 30,000 X 1 10 = 3,000

 Amount to be Debited to B’s Capital = 30,000 X 1 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. 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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