Question

A and B are partners sharing profit in the ratio 3:2. On 1st April 2019 they decided to admit C their new ratio is decide to be equal. Pass necessary journal entry to distribute Investment Fluctuation Reserve of ₹60000 at the time of C’s admission, when Investment appear in the books at ₹210000 and market value at ₹190000

Answer 1

Answer:

Investment Fluctuation Reserve A/c...Dr. 40,000

To A's Capital A/c. 24,000

To B's Capital A/c. 16,000

( Being IFR Credited To Old Partners Capital A/c in Thier Old Profit Sharing Ratio)

Explanation:

Investment Fluctuation Resreve To Be Distributed Among Old Partners

= 60,000-20,000(Loss)

= 40,000