Solve the following: Q 2 A, B and C are partners in a firm sharing profits and losses in - Accountancy - Reconstitution- Change in Existing Profit Sharing Ratio

Question

Solve the following:
Q 2 A, B and C are partners in a firm sharing profits and losses in
the ratio of 2 : 2 : 1 and from today onwards, they decided to
share future profits and losses equally What single journal entry
shall be passed for following items:
(i) General Reserve appearing in the balance sheet at Rs 60,000
(ii) Goodwill is valued at Rs 30,000
(iii) Revaluation of assets and liabilities show a profit of Rs
30,000

Neha Chopra · Accepted Answer

Dear
Student

Calculation of
Sacrificing and Gaining Partners

A
B
C

Old
Ratio
2/5
2/5
1/5

Less : New
Ratio
1/3
1/3
1/3

1/15
1/15
- 2/15

Sacrificing
Sacrificing
Gaining

Particulars
A
B
C
Total

Net amount to be Credited
or (Debited) :

General
Reserve
24,000
24,000
12,000
60000

Revaluation
Profit
12,000
12,000
6,000
30000

Goodwill Adjustment on
the basis of gaining or sacrificing ratio
2,000
2,000
(4,000)

Net
Effect
38,000
38,000
14,000
90,000

Credit
Credit
Credit

Journal

Date
Particulars

Debit
Credit

Revaluation
A/c
Dr
30,000

General Reserve
A/c
Dr
60,000

To A's Capital
A/c

38,000

To B's Capital
A/c

38,000

To C's Capital
A/c

14,000

(Being adjustment done on
the basis of change)

Regards

Calculation of Sacrificing and Gaining Partners
	A	B	C
Old Ratio	2/5	2/5	1/5
Less : New Ratio	1/3	1/3	1/3
	1/15	1/15	- 2/15
	Sacrificing	Sacrificing	Gaining

Particulars	A	B	C	Total
Net amount to be Credited or (Debited) :
General Reserve	24,000	24,000	12,000	60000
Revaluation Profit	12,000	12,000	6,000	30000
Goodwill Adjustment on the basis of gaining or sacrificing ratio	2,000	2,000	(4,000)
Net Effect	38,000	38,000	14,000	90,000
	Credit	Credit	Credit

Journal
Date	Particulars		Debit	Credit
	Revaluation A/c	Dr.	30,000
	General Reserve A/c	Dr.	60,000
	To A's Capital A/c			38,000
	To B's Capital A/c			38,000
	To C's Capital A/c			14,000
	(Being adjustment done on the basis of change)