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Accountancy · 2024 · 3 marks
Reconstitution of a Partnership Firm – Admission of a PartnerChange in Profit Sharing Ratio among the Existing Partners3 marksshort answer
CBSE 2024 · Region 5 · Set 1 · Q18
Mahesh, Ramesh and Naresh were partners in a firm sharing profits in the ratio of 5: 3: 2. From 1st April, 2023, they decided to share profits…
Mahesh, Ramesh and Naresh were partners in a firm sharing profits in the ratio of $\displaystyle 5$ : $\displaystyle 3$ : 2. From 1st April, $\displaystyle 2023$, they decided to share profits equally. On that date, there was a balance of ₹ $\displaystyle 3,60,000$ in General Reserve and a debit balance of ₹ $\displaystyle 1,80,000$ in the Profit and Loss Account. Pass single adjustment Journal entry for the above on account of change in the profit sharing ratio.
Ravi, Guru, Mani and Sonu were partners in a firm sharing profits in the ratio of the $\displaystyle 2$ : $\displaystyle 2$ : $\displaystyle 2$ : 1. On 31st January, $\displaystyle 2023$, Sonu retired. On Sonu's retirement the Goodwill of the firm was valued at ₹ $\displaystyle 1,40$,000. The new profit sharing ratio among Ravi, Guru and Mani was agreed as $\displaystyle 5$ : $\displaystyle 1$ : 1. Showing your workings clearly, pass necessary Journal entry for the treatment of Goodwill in the books of the firm on Sonu's retirement without opening goodwill account.
Marking-scheme solution
Books of Mahesh, Ramesh and Naresh
Journal
Date Particulars LF Dr. Cr.
Amount Amount
(₹) (₹)
$\displaystyle 2023$
Apr.1 Ramesh’s Capital A/c Dr. $\displaystyle 6,000$
Naresh’s Capital A/c Dr. $\displaystyle 24,000$
To Mahesh’s Capital A/c $\displaystyle 30,000$
(Adjustment made for General Reserve and debit balance
of Profit and loss Account on account of change in profit
sharing ratio among partners)
Working Notes:
(i)
Items to be adjusted:
₹
General reserve $\displaystyle 3,60,000$
Profit and Loss Account (Dr.) ($\displaystyle 1,80,000$)
$\displaystyle 1,80,000$
(ii)
Calculation of sacrifice/ gain:
Sacrificing share= Old share- new share
Mahesh: $\displaystyle 5$/$\displaystyle 10$- $\displaystyle 1$/$\displaystyle 3$ =$\displaystyle 5$/$\displaystyle 30$ (sacrifice)
Ramesh: $\displaystyle 3$/$\displaystyle 10$- $\displaystyle 1$/$\displaystyle 3$ = -$\displaystyle 1$/$\displaystyle 30$ (gain)
Naresh: $\displaystyle 2$/$\displaystyle 10$- $\displaystyle 1$/$\displaystyle 3$ = -$\displaystyle 4$/$\displaystyle 30$ (gain)
Q. (b) Ravi, Guru, Mani and Sonu……
Ans.
Books of Ravi, Guru, Mani and Sonu
Journal
Date Particulars LF Dr.Amount Cr.Amount
(₹) (₹)
$\displaystyle 2023$
Jan.31 Ravi’s Capital A/c Dr. $\displaystyle 60,000$
To Sonu’s Capital A/c $\displaystyle 20,000$
To Guru’s Capital A/c $\displaystyle 20,000$
To Mani’s Capital A/c $\displaystyle 20,000$
(Ravi compensated Sonu for his share of goodwill
and to Guru and Mani for the sacrifice made by them
on Sonu’s retirement)
Working Notes:
(ii)
Calculation of gaining share:
Gaining share= New share- Old share
Ravi: $\displaystyle 5$/$\displaystyle 7$- $\displaystyle 2$/$\displaystyle 7$ =$\displaystyle 3$/$\displaystyle 7$ (gain)
Guru: $\displaystyle 1$/$\displaystyle 7$- $\displaystyle 2$/$\displaystyle 7$ = - $\displaystyle 1$/$\displaystyle 7$ (sacrifice)
Mani: $\displaystyle 1$/$\displaystyle 7$- $\displaystyle 2$/$\displaystyle 7$ = - $\displaystyle 1$/$\displaystyle 7$ (sacrifice)
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