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A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.?
Most Upvoted Answer
A and B are partners in a firm sharing profits in the ratio 3:2.They d...
Were Rs. 50,000.
Initially, A and B shared profits in the ratio of 3:2. This means that A would have received 3/5th of the profits and B would have received 2/5th of the profits.
So, A's share of the profits = 3/5 * Rs. 50,000 = Rs. 30,000
B's share of the profits = 2/5 * Rs. 50,000 = Rs. 20,000
Now, they have decided to share profits equally. This means that both A and B will receive 1/2 or 50% of the profits each.
So, A's new share of the profits = 1/2 * Rs. 50,000 = Rs. 25,000
B's new share of the profits = 1/2 * Rs. 50,000 = Rs. 25,000
To calculate the adjustment that needs to be made, we need to find out the difference between their old shares and new shares.
For A:
Adjustment = Rs. 25,000 - Rs. 30,000 = -Rs. 5,000 (negative because A's new share is lower than his old share)
For B:
Adjustment = Rs. 25,000 - Rs. 20,000 = Rs. 5,000
Therefore, A needs to contribute Rs. 5,000 to the firm and B needs to receive Rs. 5,000 from the firm. This adjustment will ensure that both partners now have an equal share in the profits and losses.
Initially, A and B shared profits in the ratio of 3:2. This means that A would have received 3/5th of the profits and B would have received 2/5th of the profits.
So, A's share of the profits = 3/5 * Rs. 50,000 = Rs. 30,000
B's share of the profits = 2/5 * Rs. 50,000 = Rs. 20,000
Now, they have decided to share profits equally. This means that both A and B will receive 1/2 or 50% of the profits each.
So, A's new share of the profits = 1/2 * Rs. 50,000 = Rs. 25,000
B's new share of the profits = 1/2 * Rs. 50,000 = Rs. 25,000
To calculate the adjustment that needs to be made, we need to find out the difference between their old shares and new shares.
For A:
Adjustment = Rs. 25,000 - Rs. 30,000 = -Rs. 5,000 (negative because A's new share is lower than his old share)
For B:
Adjustment = Rs. 25,000 - Rs. 20,000 = Rs. 5,000
Therefore, A needs to contribute Rs. 5,000 to the firm and B needs to receive Rs. 5,000 from the firm. This adjustment will ensure that both partners now have an equal share in the profits and losses.
Community Answer
A and B are partners in a firm sharing profits in the ratio 3:2.They d...
A's capital a/c Dr 24,000
B's capital a/c Dr 16,000
To p/l a/c 40,000
(being loss distributed in old ratio)
general reserve a/c Dr 10,000
To A's capital a/c 6,000
To B's capital a/c 4,000
(being accumulated profit distributed in old ratio)
B's capital a/c Dr 16,000
To p/l a/c 40,000
(being loss distributed in old ratio)
general reserve a/c Dr 10,000
To A's capital a/c 6,000
To B's capital a/c 4,000
(being accumulated profit distributed in old ratio)
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A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.?
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A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.?.
A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.?.
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A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.?, a detailed solution for A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? has been provided alongside types of A and B are partners in a firm sharing profits in the ratio 3:2.They decided to share profits and losses equally .On the date of change in the profit-sharing ratio.Profits & loss Account showed a debit balance of ₹40000 and a General Reserve of ₹10000.Record the necessary Journal entry the distribution of the balance in the Profit & loss Account and General Reserve before the change in the profit - sharing ratio.? theory, EduRev gives you an
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