Question

X, Y and Z are partners sharing profits ands losses in the ratio of 6 : 3 : 1. They decide to take W into partnership with effect from 1st April, 2018. The new profit-sharing ratio between X, Y, Z and W will be 3 : 3 : 3 : 1. They also decide to record the effect of the following revaluations without affecting the book values of the assets and liabilities by passing a single adjustment entry:
Pass necessary adjustment entry.

Answer 1

Answer:

Some think that an equal relationship is when both partners make roughly the same amount of money. Others think equality means both partners share equally in doing the housework. ... Often concepts about equality come from some belief system and are imposed on the relationship by one partner or another.

Answer 2

Necessary adjustment entries are given below.

Explanation:

Old Ratio for X, Y and Z is given as 6:3:1.

After W’s admission, ratio becomes 3:3:3:1.

Calculation of Sacrificing Ratio:

Sacrificing Ratio will be calculated by deducting new ratio from old ratio.

X’s sacrificing ratio = 6/10 – 3/10 = 3/10

Y’s sacrificing ratio = 3/10 – 3/10 =Nil

Z’s sacrificing ratio = 1/10 – 3/10 = - (2/10) gain

W’s = 1/10 (Gain)

Calculation of Revaluation Profit:

Revaluation profit will be calculated as:

Amount to be credited to X’s account

$=35,000 \times \frac{3}{10}=10,500$

Amount to be debited to Z’s account

$=35,000 \times \frac{2}{10}=-7,000$

Amount to be debited to W’s account

$=35,000 \times \frac{1}{10}=-3,500$

Thus, an amount of Rs. 7000 and Rs. 3500 has been debited from Z and W's capital account and has been credited to X's capital account.