Question

X, Y and Z are partners sharing profits and losses in the ratio of 7 : 5 : 4 . Their Balance Sheet as at 31st March, 2018 stood as:
Partners decided that with effect from 1st April, 2018 , they will share profits and losses in the ratio of 3 : 2 : 1. For this purpose, goodwill of the
firm was valued at ₹ 1,50,000. The partners neither want to record the goodwill nor want to distribute the General Reserve and profits.

Answer 1

Debited to X's Capital =  Rs.15,000

Debited to Y's Capital =Rs.5,000

Credited to Z's Capital = Rs.20,000

Explanation:

Calculation of Gaining/Sacrificing  Ratio

Old Ratio between X,Y and Z is  7:5:4

New Ratio between X,Y and Z is 3:2:1

Sacrificing or Gaining Ratio = Old ratio - New ratio

X's Share = $\frac{5}{16}$ - $\frac{2}{6}$ = -$\frac{3}{48}$

Y's Share =$\frac{5}{16}$ - $\frac{2}{6}$ = -$\frac{1}{48}$

Z's Share  = $\frac{4}{16}$ - $\frac{1}{6}$ = $\frac{4}{48}$

Adjustment of General reserve ,Profit,loss Account and Good will

Total amount for Adjustment = General reserve +Profit and loss Account + Good will = 65,000+ 25,000+ 1,50,000 = 2,40,000.

Debited to X's Capital = 2,40,000 ×$\frac{3}{48}$ = Rs.15,000

Debited to Y's Capital =2,40,000 ×$\frac{1}{48}$ = Rs.5,000

Credited to Z's Capital 2,40,000 ×$\frac{4}{48}$ = Rs.20,000

Answer 2

Answer:

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