Accountancy

A, B and C are sharing profits and losses in the ratio of 2 : 2 : 1. They decided to share profit w.e.f. 1st April, 2019 in the ratio of 5 : 3 : 2. They also decided not to change the values of assets and liabilities in the books of account. The book values and revised values of assets and liabilities as on the date of change were as follows: 

 ParticularsBook values (Rs.) Revised values (Rs.)Machinery2,50,0003,00,000Computers2,00,0001,75,000Sundry Creditors90,00075,000Outstanding Expenses15,00025,000 Pass an adjustment entry. Solution

Continue ReadingA, B and C are sharing profits and losses in the ratio of 2 : 2 : 1. They decided to share profit w.e.f. 1st April, 2019 in the ratio of 5 : 3 : 2. They also decided not to change the values of assets and liabilities in the books of account. The book values and revised values of assets and liabilities as on the date of change were as follows: 

A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as follows:

LiabilitiesAmount (Rs.)AssetsAmount  (Rs.)Capital A/c : Land and Building3,50,000 A - 2,50,000 Machinery2,40,000 B - 2,50,000 Computers70,000 C - 2,00,0007,00,000Investments (Market value Rs. 90,000)1,00,000General Reserve 60,000Sundry Debtors50,000Investments Fluctuation Reserve 30,000Cash in Hand10,000Sundry Creditors 90,000Cash at Bank55,000   Advertisement Suspense5,000  8,80,000 8,80,000 They decided to share profits…

Continue ReadingA, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as follows:

Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2019 was as follows:

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Sundry Creditors75,000Cash in Hand24,000General Reserve90,000Cash at Bank1,40,000Capital A/c : Sundry Debtors80,000  Ashish - 3,00,000 Stock1,40,000  Aakash - 3,00,000 Land and Building4,00,000  Amit - 2,75,0008,75,000Machinery2,50,000   Advertisement Suspense6,000  10,40,000  10,40,000  The partners decided to share profits in the ratio…

Continue ReadingAshish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2019 was as follows:

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 .

 ParticularsBook Values (Rs.) General Reserve 6,000 Profit and Loss A/c (Credit)24,000 Advertisement Suspense A/c12,000 Pass an Adjustment Entry. Solution

Continue ReadingX, 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 .

Bhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3: 2. On 31st March, 2018 their Balance Sheet was as under:

BALANCE SHEET OF BHAVYA AND SAKSHIas at 31st March, 2018 LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Sundry Creditors 13,800Furniture16,000General Reserve 23,400Land and Building56,000Investment Fluctuation Fund 20,000Investments30,000Bhavya's Capital 50,000Trade Receivables18,500Sakshi's Capital40,000Cash in Hand26,700 1,47,200 1,47,200 The partners have decided to change their profit-sharing ratio to 1: 1…

Continue ReadingBhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3: 2. On 31st March, 2018 their Balance Sheet was as under:

Mita, Gopal l and Farhan were partners sharing profits and losses in the ratio 3:2:1. On 31st March, 2018 they decided to change the profit-sharing ratio to 5:3:2. On this date, the Balance Sheet showed deferred advertisement expenditure Rs. 30,00 and contingency reserve Rs. 9,000.

Solution

Continue ReadingMita, Gopal l and Farhan were partners sharing profits and losses in the ratio 3:2:1. On 31st March, 2018 they decided to change the profit-sharing ratio to 5:3:2. On this date, the Balance Sheet showed deferred advertisement expenditure Rs. 30,00 and contingency reserve Rs. 9,000.

X and Y are partners sharing profits in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet showed General Reserve of Rs. 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2. Pass necessary Journal entry in each of the following alternative cases: (i) When General Reserve is not to be shown in the new Balance Sheet. (ii) When General Reserve is to be shown in the new Balance Sheet.

Solution

Continue ReadingX and Y are partners sharing profits in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet showed General Reserve of Rs. 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2. Pass necessary Journal entry in each of the following alternative cases: (i) When General Reserve is not to be shown in the new Balance Sheet. (ii) When General Reserve is to be shown in the new Balance Sheet.

X, Y and Z who are sharing profits in the ratio of 5 : 3 : 2, decide to share profits in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. Workmen Compensation Reserve appears at Rs. 1,20,000 in the Balance Sheet as at 31st March, 2019 and Workmen Compensation Claim is estimated at Rs. 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve. 

Solution

Continue ReadingX, Y and Z who are sharing profits in the ratio of 5 : 3 : 2, decide to share profits in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. Workmen Compensation Reserve appears at Rs. 1,20,000 in the Balance Sheet as at 31st March, 2019 and Workmen Compensation Claim is estimated at Rs. 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve. 

A, B and C who are presently sharing profits and losses in the ratio of 5: 3: 2 decide to share future profits and losses in the ratio of 2: 3: 5. Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of Rs. 1,20,000 at the time of change in profit-sharing ratio, when: (i) no other information is given; (ii) there is no claim against it.

Solution

Continue ReadingA, B and C who are presently sharing profits and losses in the ratio of 5: 3: 2 decide to share future profits and losses in the ratio of 2: 3: 5. Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of Rs. 1,20,000 at the time of change in profit-sharing ratio, when: (i) no other information is given; (ii) there is no claim against it.