Question

X and y are partners sharing profits in 2 : 1 the undermentioned trial balance was extracted from their books as at 31st march 2019

Answer 1

Answer:

Partnership accounting rules states that when any accumulated profit has to be shown in balance sheet, it is distributed amongs partners but when they are not to be shown, some percent of that reserve is distributed.

Journal entry in case 1:

General Reserve a/c Dr. Rs60,000

To X's capital a/c R40,000

To Y's capital a/c Rs20,000

Journal entry in case 2:

Y's capital a/c Dr. Rs4,000

  To X's capital a/c Rs4,000.