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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 VK Publication

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Question 32 Chapter 3 of Class 12 Part – 1

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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
Pass necessary adjusting journal entry.

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

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

Particulars

X

YZ
Partners’ Old Ratio5/103/102/10
Partners’ New Ratio2/103/105/10
Difference3/10NIL(-3)/10
Net EffectSacrificeNo EffectGain

Amount to be Adjusted:

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

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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