Question

20) Asha and Usha commenced business in partnership with capital of 2,00,000 and
1,60,000 respectively on 01-04-2020 agreeing to share profits and losses in the ratio
of 3:2 for the year ending 31-03-2021. They earned the profits of 772,000 before
allowing
i) Interest on capital 8%
ii) Interest on Drawings Asha 600 Usha * 1,000.
iii) Yearly salary of Asha 12,000 and commission of Usha 8,000.
iv) Their drawings during the year Asha 32,000 and Usha 40,000.
Prepare Profit and Loss Appropriation account​

Answer 1

Answer:New profit sharing ratio is 1/2:1/2.

Share of Goodwill as per old ratio  

X = Rs.60000 *3 = Rs.36000

            5

Y = Rs.60000 *2 = Rs.24000

            5

As per new ratio, Share of Goodwill will be Rs.30000 to X and Rs.30000 to Y. Hence an adjustment entry need to be passed for adjustment of Goodwill for Rs.6000.

X A/c                                           Dr. 6000

    To Y A/c                                                   6000

(Being different of goodwill as per old ratio and new ratio is adjusted)