Q. 31. X, Y and Z were sharing profits and losses in the ratio of 5:3:2. They
decided to share future profits and losses in the ratio of 2 : 3:5 with effect from
1.4.2017. They decided to record the effect of the following, without effecting their book values
p&l account 24000
advertising suspence account 12000
Answers
Answered by
1
Answer:
Z's Capital a/c..............Dr. 70200
To X's Capital a/c 70200
(Being adjustment entry passed)
Working notes:
1. Amount to be distributed = general reserve + P and L a/c - advertisement suspense
= 6000 +240000 -12000 = 234000
2. Calculation of sacrifice and gain
X: 2/10-5/10 = (3/10) sacrifice
Z: 5/10 - 2/10 = 3/10 gain
Explanation:
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