Question

Reema and seema are partners sharing profits and losses in the ratio of 4:1 they decided to share profits in the ratio of 3:2 w.e.f 1st Apr 2019 the decision to change the profit sharing ratio was taken after creating shares of profit for the year ended 31st March 2020 to respective partners capital accounts which was 100000
Goodwill of the firm as at 1st april,2019 was valued at 75000 capital accounts profit credit balances as at 31st March 2020 were reema-500000 and seema-600000 pass nessesary journal entries and Prepare capital accounts

Answer 1

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Profit and Loss Appropriation a/c

(for the year ended 31st March,2018)

Dr. Cr.

Particulars Amount Particulars Amount

To Profit and Loss a/c 100000 By Interest on Drawings:

- Reema

- Seema

6000

6000

To Interest on Capital a/c

- Reema

- Seema

25000

25000 By Loss transferred to:

- Reema's Capital a/c

- Seema's Capital a/c

249000

249000

To Salary a/c

- Reema (15000*12)

- Seema (15000*12)

180000

180000

510000 510000