A and B were Partners in a fom sharing bafites
in the ratio of 5:3. Their capitals on 31st march 2017
were : A Rs. 60.000 and B Rs 80,000 . They agreed to alloa
interest on Capital @ 12%. P.a. The Profit of the film
for the year ended 31 march 2018 before allowing
interest on Capital was les 12600. Pass necessary
journal entries for the above transactions in the books of
Afg. Also show your working notes clearly.
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Answer:
Investment Fluctuation Reserve A/c.......Dr. 5000
To Investments A/c 5000
(Being decrease in the market value of the investments adjusted with the reserve)
2. Investment Fluctuation Reserve A/c.......Dr. 15000
To X's Capital A/c 7500
To Y's Capital A/c 4500
To Z's Capital A/c 3000
(Being the balance in investment fluctuation reserve distributed in the old ratio)
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