Question

A,B and C were are partners in a firm sharing profits in the ratio of 3:4:1 .They decided to share profits equally w.e.f from 1 .4.2019. On that date the profit and loss account showed the credit balance of 96,000.instead of closing the profit and loss account ,it was decided to record an adjustment entry reflecting the change in profit sharing ratio .In the journal entry
4 points
a) Dr. A by 4,000; Dr. B by 16,000; Cr C by 20,000
b) Cr. A by 4,000; Cr. B by 16,000; Dr C by 20,000
c) Cr. A by 16,000; Cr. B by 4,000; Dr C by 20,000
d) Dr. A by 16,000; Dr. B by 4,000; Cr C by 20,000​

Answer 1

Answer:

B)Cr.Aby 4000 cr B by 16000 dr c by 20000 is ans

Answer 2

Answer:

An adjustment entry reflecting the change in profit sharing ratio is option is a) Dr. A by 4,000; Dr. B by 16,000; Cr C by 20,000.

Explanation:

One of the conditions of reconstitution of the firm is Change in Profit Sharing Ratio among Existing Partners. Here there is no difference in the partners carrying on the business of the firm.

An adjusting entry exists an entry created to allocate the right amount of revenue and expenses to each accounting period. It updates previously recorded journal entries so that the financial statements at the end of the year exist accurate and up-to-date.

Given that,

• A B and C were existing partners firm sharing profits in the ratio of 3:4:1
• They determined to share profits equally w.e.f from 1 .4.2019.
• the profit and loss account established a credit balance of 96,000.

Hence, The correct option is a) Dr. A by 4,000; Dr. B by 16,000; Cr C by 20,000.