Pawan, Iqbal and Rick are partners sharing profits in the ratio of 2 : 2 : 1 From 1st - Accountancy - Reconstitution- Change in Existing Profit Sharing Ratio

Question

Pawan, Iqbal and Rick are partners sharing profits in the ratio of
2 : 2 : 1 From 1st April, 2016, they decided to share profits in
the ratio of 1 : 2 : 2 On that date, following balances appeared in
the balance sheet Profit and loss (debit balance Rs 40,000);
general reserve Rs 1,40,000; deferred revenue expenditure Rs
20,000

Pass adjusting journal entry when these reserves will appear in the
books of the re-constituted firm

Nitin Verma · Accepted Answer

Dear Student,

Journal

Particulars
L F
Debit Amount
Rs
Credit Amount
Rs

Rick’ s Capital A/c
Dr

16,000

To Pawan’s Capital
A/c

16,000

(Adjustment entry made)

Notes:
Calculation of sacrifice or gainPawan=25-15=15sacrificeIqbaal=25-25=0Rick=15-25=-15gainTotal amount to be adjusted=General reserve-P/LDr
-Deferred revenue expenditure                                         =1,40,000-40,000-20,000=Rs
 80,000Pawan and Rick's share=80,000×15=Rs
 16,000

Regards

Journal
Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
Rick’ s Capital A/c	Dr.		16,000
To Pawan’s Capital A/c				16,000
(Adjustment entry made)