Question

Hari and Ravi are partners in a firm sharing profits in the ratio of 5: 3. On 31.3.2003 their balance sheet showed a General Reserve of Rs. 80,000. On that date they decided to admit Mohan as a new partner. The new profit sharing ratio between Hari, Ravi and Mohan will be 5: 3: 2. Pass the necessary journal entry in the books under the following circumstances: (i) When they want to transfer the General Reserve in their capital accounts. (ii) When they do not want to transfer General Reserve in their capital accounts and prefer to pass an adjustment entry for the same.​

Answer 1

Answer:

(i) general reserve a/c -. Rs.80000

To hari's capital a/c -. rs50000

To Ravi's capital a/c - rs30000