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Standard XII

Accountancy

Salary/Commission

X, Y and Z ar...

Question

X, Y and Z are sharing profits and losses in the 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, 2019. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry .

Book Values (₹)

General Reserve 6,000

Profit and Loss A/c (Credit) 24,000

Advertisement Suspense A/c 12,000

Pass an Adjustment Entry.

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

2019
April 1

Z’s Capital A/c

Dr.

5,400

To X’s Capital A/c

5,400

(Adjustment for General Reserve, Profit and Loss A/c and Advertisement Suspense account is made on change in profit sharing ratio)

_{Working Notes:}

_{WN 1}

WN 2 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (X, Y and Z) = 5 : 3 : 2

New Ratio (X, Y and Z) = 2 : 3 : 5

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

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Similar questions

Q. X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2 . They decided to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2018. They also decided to record the effect of the following accumulated profits,losses and reserves without affecting their book values by passing a single entry .

	Book Value(₹)
General Reserve	6,000
Profit and Loss A/c ( Credit)	24,000
Advertisement Suspense A/c	12,000

Pass an Adjustment Entry.

X, Y

and

Z

are sharing profit and losses in the ratio of

5 : 3 : 2

. They decide to share future profits and losses in the ratio of

2 : 3 : 5

with effect from

1 s t

April,

2018

. They also decided to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry.
Book value (Rs.)

General Reserve	$6, 000$
Profit and Loss A/c (Credit)	$240000$
Advertisement Suspense A/c	$12, 000$

Q. A, B, and C are partners sharing profits in the ratio of

5 : 3 : 2.

They decided to share future profits in the ratio of

2 : 3 : 5

with effect from

1 s t

April

, 2018.

They also decided to adjust the following accumulated profit, losses and reserves without affecting their book values, by passing an adjustment entry:

	Book value (Rs.)
Profit and Loss A/c	15,000
General Reserve	60,000
Advertising Suspense A/c	30,000

The necessary adjustment entry will be:

A, B

and

C

were partners sharing profits and losses in the ratio of

6 : 3 : 1

. They decide to take

D

into partnership with effect from

1^{s t}

April,2018. The new profit-sharing ratio between

A, B, C

and

D

will be

3 : 3 : 3 : 1

. They also decided to record the effect of the following without affecting their book values, by passing a single adjustment entry:

	Book Value (Rs.)
General Reserve	1,50,000
Contingency Reserve	60,000
Profit and Loss A/c(Cr.)	90,000
Advertisement Suspense A/c (Dr.)	1,20,000

Pass the necessary single adjustment entry, through the partner's Current Account.

Q. X, Y and Z are partners sharing profits in the ratio of

5 : 3 : 2.

They decide to share future profits in the ratio of

2 : 3 : 5

with effect from

1^{s t}

April,

2018

. They also decide to record the effect of following revaluation without affecting the book values of assets and liabilities, by passing single adjusting entry :

	Book Value (Rs.)	Revised Value (Rs.)
Land and Building	3,00,000	4,50,000
Plant and Machinery	4,50,000	4,20,000
Trade Creditors	1,50,000	1,35,000
Outstanding Rent	1,35,000	1,80,000

The necessary single adjustment entry will be:

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	Book Values (₹)
General Reserve	6,000
Profit and Loss A/c (Credit)	24,000
Advertisement Suspense A/c	12,000

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019 April 1	Z’s Capital A/c	Dr.		5,400
	To X’s Capital A/c				5,400
	(Adjustment for General Reserve, Profit and Loss A/c and Advertisement Suspense account is made on change in profit sharing ratio)