A and B are partners in a firm sharing profits in the ratio of 2 : 1. They decided with effect from 1st April, 2018, that they would share profits in the ratio of 3 : 2. But, this decision was taken after the profit for the year ended 31st March, 2019 of Rs. 90,000 was distributed in the old ratio. The profits for the year ended 31st March, 2017 and 2018 were Rs. 60,000 and Rs. 75,000 respectively. It was decided that Goodwill Account will not be opened in the books of the firm and necessary adjustment be made through Capital Accounts which on 31st March, 2019 stood at Rs. 1,50,000 for A and Rs. 90,000 for B. Pass necessary Journal entries and prepare Capital Accounts.

A and B are partners in a firm sharing profits in the ratio of 2 : 1. They decided with effect from 1st April, 2018, that they would share profits in the ratio of 3 : 2. But, this decision was taken after the profit for the year ended 31st March, 2019 of Rs. 90,000 was distributed in the old ratio. The profits for the year ended 31st March, 2017 and 2018 were Rs. 60,000 and Rs. 75,000 respectively. It was decided that Goodwill Account will not be opened in the books of the firm and necessary adjustment be made through Capital Accounts which on 31st March, 2019 stood at Rs. 1,50,000 for A and Rs. 90,000 for B. Pass necessary Journal entries and prepare Capital Accounts.

Post category:Accountancy
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