Question 7 Chapter 4 – Unimax Class 12 Part 1 – 2021

Question 7 Chapter 4 - Unimax Class 12 Part 1 - 2021

Question 7 Chapter 4 – Unimax Class 12 Part 1

7. X, Y and Z are partners in a firm sharing profits in 1 : 2 : 3. Their Balance Sheet as at 31.3.21, showed a Balance of Rs. 120000 in general Reserve. From 1.4.21 they will share profits equally. Pass the necessary Journal entry to give effect to the above arrangement when X, Y and Z decide not to close the general reserve account.

The solution of Question 7 Chapter 4 – Unimax Class 12 Part 1:

Old Share New Share Difference
X            1/6 1/3 1/6_1/3=[1/6] (gain)       
Y            2/6 1/3  2/6_1/3=0 (No change)
Z           3/6 1/3 3/6_1/3=[1/6] (loss)

X will pay to Z, 1/6 share of General Reserve ( i.e. 120000 x 1/6 = Rs. 20000)

Journal

Date Particulars   L.F. Debit Credit
  X’s Capital A/c Dr.   20,000  
    To Z’s Capital A/c       20,000
  (Being adjustment entry Passed for share of General Reserve on change in profit sharing ratio)        
           

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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)

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

 

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