Question

Benu and Sunil are partners sharing profits in the ratio of 3:2 on April 1, 2017. Ina was admitted for 1/4 share who paid Rs. 2,00,000 as capital and Rs. 1,00,000 for premium in cash. At the time of admission, general reserve amounting to Rs. 1,20,000 and profit and loss account amounting to Rs. 60,000 appeared on the asset side of the balance sheet. Required: Record necessary journal entries to record the above transactions.

Answer 1

Explanation:

1.     Cash a/c                                          Dr    300000

                 To Benu's capital a/c                                    60000

                 To Sunil's capital a/c                                    40000

                 To Ina capitals a/c                                        200000

(Being Capital and goodwill brought by Ina)

2.    General Reserve a/c                       Dr    120000

                 To Benu's capital a/c                                    72000

                 To Sunil's capital a/c                                     48000

(Being general reserve distributed to partners)

3.     Benu's Capital a/c                          Dr    27000

       Sunil's Capital a/c                           Dr    18000

       Ina's Capital a/c                              Dr    15000

                 To Profit and Loss a/c                                   60000

(Being profits distributed at 9:6:5)

Answer 2

Explanation:

the accumulated profits should be distributed among old partners in old profit sharing ratio