# Question 32 Chapter 3 of Class 12 Part – 1 VK Publication

Question 32 Chapter 3 of Class 12 Part - 1 VK Publication

Question 32 Chapter 3 of Class 12 Part – 1

32. X, Y and Z were sharing profits and losses in the ratio of 5:3:2. They decided to share future profits and losses in the ratio of 2:3:5 with effect from 1st April, 2018 record the effect of the following, without affecting their book values:
(i) Profit and Loss Account Rs. 24,000 and (ii) Advertisement Suspense Account Rs. 12,000

## The solution of Question 32 Chapter 3 of Class 12 Part – 1: –

Total Profit = 60,000+1,50,000+1,70,000+1,90,000-70,000 = Rs. 5,00,000

 Average Profit = 5,00,000 5

= Rs. 1,00,000

Goodwill at three years’ purchase= 1,00,000 x 3 = Rs . 3,00,000
Effect of change in profit sharing ratio:

 Particulars X Y Z Partners’ Old Ratio 5/10 3/10 2/10 Partners’ New Ratio 2/10 3/10 5/10 Difference 3/10 NIL (-3)/10 Net Effect Sacrifice No Effect Gain

 Profit and Loss Account= Rs. 24,000 Less: Advertisement Suspense Account= Rs. 12,000 Rs. 12,000

Amount of compensation= 12,000 x 3/10= Rs. 3,600

Journal Entry

 Date Particulars L . F Dr. ₹ Cr. ₹ 2018 Z’s Capital A/c Dr. 3,600 April 1 To X’s Capital A/c 3,600 ( Being adjustment of amount on change in profit sharing ratio)

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