Question

A and B are partners in a firm sharing profits in the ratio of 4 : 1 . They decided to share future profits in the ratio of 3 : 2 w.e.f. 1st April,2018 . On that day, Profit and Loss Account showed a debit balance of ₹ 1,00,000.Pass journal entry to give effect to the above.

Answer 1

Solution:

                                                      Journal  

Date                      Particulars                     L.F.    Debit Rs.       Credit Rs.  

                        A's Capital A/c              Dr.            80,000  

                        B's Capital A/c              Dr.            20,000  

                            To Profit and Loss A/c                                  1,00,000  

              (Being Profit and Loss distributed)