Question 9 Chapter 4 – Unimax Class 12 Part 1
9. A, B and C are three partners sharing Profits and Losses in ratio of 5 : 3 : 2. They decide to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2021. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book figures by passing a single adjusting entry.
General Reserve Rs. 24000
Profit and Loss A/c Rs. 6000 (Cr.)
Advertisement suspense A/c Rs. 12000 (Dr.)
You are required to pass the necessary single adjusting entry.
The solution of Question 9 Chapter 4 – Unimax Class 12 Part 1
| Old Share | New Share | Difference |
| X 5/10 | 2/10 | 5/10_2/10=3/10 (Sacrifice) |
| Y 3/10 | 3/10 | 3/10_3/10=0 (No change) |
| Z 2/10 | 5/10 | 2/10_5/10=[3/10] (Gain) |
Net Accumulated Profits = General Reserve + Profits & Loss A/c (Cr.) – Advertisement Suspense Account
= Rs. 24000 + Rs. 6000 – Rs. 12000
= Rs. 18000
C will pay to A Rs. 5400 ( 18000 x 3/10), on change in profit sharing ratio.
Journal
| Date | Particulars | L.F. | Debit | Credit | |
| April 1 2007 | C’s Capital A/c | Dr. | 5400 | ||
| To A’s Capital A/c | 5400 | ||||
| (Being adjustment entry Passed for treatment of accumulated profits and losses on change in constitution) | |||||
What is Partnership – Meaning and Its 4 Types
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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