Question

Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. On 1st April, 2014 they admitted Om as a new partner. On the date of Om's admission the balance sheet of Leela and Meeta showed a balance of Rs 1,60,000 in General reserve and Rs 2,40,000 (Cr) in Profit and Loss Account. Record necessary journal entries for the treatment of these items on Om's admission. The new profit sharing ratio between Leela, Meeta and Om was 5:3:2.

Answer 1

Books of Leela, Meeta and Om

JOURNAL

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Dr.(Rs)}& \text{Cr.(Rs)}\\ 2014& & & & \\ \text{April 1}& \text{General Reserve A/c}Dr.& & 1,60,000& \\ & \text{To Leela's Capital A/c}& & & 1,00,000\\ & \text{To Meeta's Capital A/c}& & & 60,000\\ & \text{(The transfer of the balance of general reserve to old}& & & \\ & \text{Partner's capital accounts in old ratio on the admission}& & & \\ & \text{of Om)}& & & \\ & \underset{–}{}& & & \\ \text{April 1}& \text{Profit \& Loss A/c}Dr.& & 2,40,000& \\ & \text{To Leela's Capital A/c}& & & 1,50,000\\ & \text{To Meeta's Capital A/c}& & & 90,000\\ & \text{(The transfer of the balnace of accumulated}& & & \\ & \text{profits to old partner's capital accounts in}& & & \\ & \text{old ratio on the admission of Om)}& & & \end{array}$