# Question 66 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 66 Chapter 2 of +2-A

66. The firm of Harry, Porter and Ali, who have been sharing profits in the ratio of 2 : 2: 1, have existed for some years. Ali wants that he should get equal share in the profits with Harry and Porter and he further wish that the change in the profit-sharing ratio should come into effect retrospectively were for the three years. Harry and Porter have agreement on this account.

 Year 2015-16 2016-17 2017-18 Profit 2,20,000 2,40,000 2,90,000

Show adjustment of profits by means of a single adjustment Journal entry

The solution of Question 66 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit Harry’s Capital A/c Dr 50,000 Porter’s Capital A/c Dr 50,000 To Ali’s Capital A/c 1,00,000 (Being adjustment made)

Working Note: –

 Statement Showing Adjustment of Profit required Particulars Harry Porter Ali Total 2015 – 16 (Profit sharing ratio i.e. 2:2:1) 88,000 88,000 44,000 2,20,000 2016 – 17 (Profit sharing ratio i.e. 2:2:1) 96,000 96,000 48,000 2,40,000 2017 – 18 (Profit sharing ratio i.e. 2:2:1) 1,16,000 1,16,000 58,000 2,90,000 wrongly Amount credited (Profit sharing ratio i.e. 2:2:1) 3,00,000 3,00,000 1,50,000 7,50,000 Less: Actual Amount to be credited (Profit sharing ratio i.e. 1:1:1) 2,50,000 2,50,000 2,50,000 7,50,000 50, 000 50, 000 -1,00,000 – Harry get less amount, so we have to credit his capital a/c with difference amount Porter get less amount, so we have to credit his capital a/c with difference amount Ali get extra so we have to debit his capital a/c with difference amount

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

### 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