# Question 34 Chapter 3 of Class 12 Part – 1 VK Publication

Question 34 Chapter 3 of Class 12 Part - 1 VK Publication

Question 34 Chapter 3 of Class 12 Part – 1

34. A, B and C were partners in a firm sharing profits in the ratio of 1:3:2. They decided that with effect from 1st April, 2018, they will share profits in the ratio of 4:6:5. For this purpose, the goodwill of the firm is valued at the total of previous three years’ profits. The profits Were:

 Year Rs. 31st March, 2015 10,000 (Loss) 31st March, 2016 80,000 (Loss) 31st March, 2017 1,20,000 31st March, 2018 1,40,000

Reserves and accumulated profits appeared in the Balance Sheet at Rs. 40,000 and Rs. 30,000 respectively. Partners neither want to show goodwill in the books nor want to distribute the reserves and profits appearing in the Balance Sheet. Pass a single journal entry to record the change.

## The solution of Question 34 Chapter 3 of Class 12 Part – 1: –

Journal Entry

 Date Particulars L . F Dr. ₹ Cr. ₹ 2017 A’s Capital A/c Dr. 25,000 April 1 To B’s Capital A/c 25,000 ( Being proportionate share of Goodwill , Reserve and P & L adjusted between partners)

Working Note:

Sacrificing Share = Old Share – New Share

 Particulars A B C Partners’ Old Ratio 1/6 3/6 2/6 Partners’ New Ratio 4/15 6/15 5/15 Difference (-3)/30 (-3)/30 (Nil)

 Profit and Loss Account Rs. 30,000 Reserve = Rs. 40,000 Goodwill = Rs. 1,80,000 Rs. 2,50,000

Amount of compensation= 2,50,000 x3/30 = Rs. 25,000

Comment if you have any questions.

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