Question

x,y, and z are equal partners in a firm. they decide to change the profit sharing ratio as 3:2:1. there is a balance in Genrel Reserve of rs.72000 but they do not want to distribute the general reserve. pass an adjustment entry​

Answer 1

Answer:

first calculate the gain/sacrifice

sacrifice= old share - new share

X = 1/3 - 3/6 = -1/6

Y = 1/3 - 2/6 = Nil

Z = 1/3 - 1/6 = 1/6

X is gaining partner and Z is sacrificing partner

X's capital account... Dr (72,000×1/6) 12,000

to Y's capital account (72,000×1/6) 12,000

if general reserve is not to be distributed then above entry is passed