Question

13. (Distribution of old reserves) A and B share profits in 5 : 3 ratio. On 31st March, 2012
they had 20,000 in general reserve and 8,000 in (Dr.) Profit & Loss A/e. The new na
with effect from 1st April, 2018 will be 3: 2. It was decided by partners that before bringing
the new ratio into force the old profit (Dr.) and general reserve should be distributed.
Journalise​

Answer 1

Answer:

General reserve and profit and loss account distributed in old ratio (5:3)

General reserve a,/c dr 20000

To A's capital a/c. 12500

To B's capital a/c. 7500

A's capital. a/c. dr. 5000

B ' s capital account dr 3000

To profit & loss account. 8000

Explanation:

profit and loss dr. balance means loss so it reduce partners capital