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1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:?
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1. P, Q and R are partners in a firm sharing profits and losses in the...
Solution:
Introduction:
In this question, we are given that three partners P, Q and R are sharing profits and losses in the ratio of 5:3:2. From 1st April, they have decided to share profits and losses in the ratio of 2:5:3. The balance sheet shows a debit balance of Rs.8,000 in profit and loss account, balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. We are required to explain the adjustments that need to be made as per the agreement.
Adjustments to be made:
The following adjustments need to be made as per the agreement:
1. Revaluation of assets and liabilities:
The assets and liabilities need to be revalued in order to determine their true value. The revaluation should be done as per the current market value. Any increase or decrease in the value of assets and liabilities should be credited or debited to the partners’ capital accounts in their new profit sharing ratio.
2. Distribution of accumulated profits and losses:
The accumulated profits and losses should be distributed among the partners in their old profit sharing ratio. The debit balance of Rs.8,000 in profit and loss account should be debited to the partners’ capital accounts in their old profit sharing ratio.
3. Adjustment of reserves:
The balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve should be distributed among the partners in their new profit sharing ratio. The amount should be credited to the partners’ capital accounts.
4. Adjustment of capital accounts:
The capital accounts of the partners should be adjusted as per the new profit sharing ratio. The amount should be credited or debited to the partners’ capital accounts as per the new profit sharing ratio.
Conclusion:
In conclusion, the adjustments mentioned above need to be made in order to change the profit sharing ratio of the partners. The revaluation of assets and liabilities, distribution of accumulated profits and losses, adjustment of reserves and adjustment of capital accounts are the key areas that need to be considered.
Introduction:
In this question, we are given that three partners P, Q and R are sharing profits and losses in the ratio of 5:3:2. From 1st April, they have decided to share profits and losses in the ratio of 2:5:3. The balance sheet shows a debit balance of Rs.8,000 in profit and loss account, balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. We are required to explain the adjustments that need to be made as per the agreement.
Adjustments to be made:
The following adjustments need to be made as per the agreement:
1. Revaluation of assets and liabilities:
The assets and liabilities need to be revalued in order to determine their true value. The revaluation should be done as per the current market value. Any increase or decrease in the value of assets and liabilities should be credited or debited to the partners’ capital accounts in their new profit sharing ratio.
2. Distribution of accumulated profits and losses:
The accumulated profits and losses should be distributed among the partners in their old profit sharing ratio. The debit balance of Rs.8,000 in profit and loss account should be debited to the partners’ capital accounts in their old profit sharing ratio.
3. Adjustment of reserves:
The balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve should be distributed among the partners in their new profit sharing ratio. The amount should be credited to the partners’ capital accounts.
4. Adjustment of capital accounts:
The capital accounts of the partners should be adjusted as per the new profit sharing ratio. The amount should be credited or debited to the partners’ capital accounts as per the new profit sharing ratio.
Conclusion:
In conclusion, the adjustments mentioned above need to be made in order to change the profit sharing ratio of the partners. The revaluation of assets and liabilities, distribution of accumulated profits and losses, adjustment of reserves and adjustment of capital accounts are the key areas that need to be considered.
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1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:?
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1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:?.
1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:?.
Solutions for 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? in English & in Hindi are available as part of our courses for Commerce.
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1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:?, a detailed solution for 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? has been provided alongside types of 1. P, Q and R are partners in a firm sharing profits and losses in the ratio of 5:3:2. From 1st April they decided to share profits and losses in the ratio of 2:5:3. Their balance sheet showed a debit balance of Rs.8,000 in profit and loss account; balance of Rs.72,000 in general reserve and Rs.24,000 in workmen compensation reserve. It was agreed that:? theory, EduRev gives you an
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