Question

Balance sheet of A B and C were given and share profit and loss in the ratio 5:3:2. b retires ​

Answer 1

Answer:

1. 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)