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

Question 66 Chapter 2 of +2-A

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)

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

 

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

2 Book 1 min - Question 66 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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