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A and B are partners in the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.?
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A and B are partners in the ratio of 3:1 . They are agreed to admit c ...
Journal Entries for Admission of C as a Partner
Introduction:
When a new partner is admitted to the firm, adjustments need to be made to the existing balances. In this case, we need to adjust the general reserve, contingency reserve, and deferred revenue expenditure-advertisement.
Journal Entries:
1. General Reserve:
The general reserve is a reserve created for the purpose of meeting future contingencies. The entry for the adjustment of the general reserve is as follows:
Particulars Debit Credit
C's Capital Account 3000 (3/5*12000)
B's Capital Account 1000 (1/5*12000)
General Reserve 4000
To adjust general reserve on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the general reserve will be divided in the ratio of 3:1 between A and B. C will not get any share in the general reserve as he is a new partner.
2. Contingency Reserve:
A contingency reserve is a reserve created for meeting unforeseen contingencies. The entry for the adjustment of the contingency reserve is as follows:
Particulars Debit Credit
C's Capital Account 2000 (3/5*8000)
B's Capital Account 666.67 (1/5*8000)
Contingency Reserve 2666.67
To adjust contingency reserve on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the contingency reserve will be divided in the ratio of 3:1 between A and B. C will not get any share in the contingency reserve as he is a new partner.
3. Deferred Revenue Expenditure-Advertisement:
Deferred revenue expenditure is an expenditure that is incurred in one accounting period but its benefits are received over multiple accounting periods. The entry for the adjustment of deferred revenue expenditure-advertisement is as follows:
Particulars Debit Credit
C's Capital Account 2000 (3/5*10000)
B's Capital Account 666.67 (1/5*10000)
Deferred Revenue Expenditure-Advertisement 2666.67
To adjust deferred revenue expenditure on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the deferred revenue expenditure will be divided in the ratio of 3:1 between A and B. C will not get any share in the deferred revenue expenditure as he is a new partner.
Conclusion:
The above journal entries are made to adjust the existing balances on the admission of C as a new partner. By making these adjustments, the new partner's capital account is created and the existing balances are divided in the agreed ratio.
Introduction:
When a new partner is admitted to the firm, adjustments need to be made to the existing balances. In this case, we need to adjust the general reserve, contingency reserve, and deferred revenue expenditure-advertisement.
Journal Entries:
1. General Reserve:
The general reserve is a reserve created for the purpose of meeting future contingencies. The entry for the adjustment of the general reserve is as follows:
Particulars Debit Credit
C's Capital Account 3000 (3/5*12000)
B's Capital Account 1000 (1/5*12000)
General Reserve 4000
To adjust general reserve on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the general reserve will be divided in the ratio of 3:1 between A and B. C will not get any share in the general reserve as he is a new partner.
2. Contingency Reserve:
A contingency reserve is a reserve created for meeting unforeseen contingencies. The entry for the adjustment of the contingency reserve is as follows:
Particulars Debit Credit
C's Capital Account 2000 (3/5*8000)
B's Capital Account 666.67 (1/5*8000)
Contingency Reserve 2666.67
To adjust contingency reserve on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the contingency reserve will be divided in the ratio of 3:1 between A and B. C will not get any share in the contingency reserve as he is a new partner.
3. Deferred Revenue Expenditure-Advertisement:
Deferred revenue expenditure is an expenditure that is incurred in one accounting period but its benefits are received over multiple accounting periods. The entry for the adjustment of deferred revenue expenditure-advertisement is as follows:
Particulars Debit Credit
C's Capital Account 2000 (3/5*10000)
B's Capital Account 666.67 (1/5*10000)
Deferred Revenue Expenditure-Advertisement 2666.67
To adjust deferred revenue expenditure on C's admission
Explanation:
As per the given ratio, A and B share the profits in the ratio of 3:1. Therefore, on C's admission, the deferred revenue expenditure will be divided in the ratio of 3:1 between A and B. C will not get any share in the deferred revenue expenditure as he is a new partner.
Conclusion:
The above journal entries are made to adjust the existing balances on the admission of C as a new partner. By making these adjustments, the new partner's capital account is created and the existing balances are divided in the agreed ratio.
Community Answer
A and B are partners in the ratio of 3:1 . They are agreed to admit c ...
A,360. B,120. C,600
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A and B are partners in the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.?
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A and B are partners in the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.? 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 the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.? 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 the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.?.
A and B are partners in the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.? 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 the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.? 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 the ratio of 3:1 . They are agreed to admit c for the 1/5 share in profit.at the date of admission of c , following balances in the balance sheet of A and B . General reserve 12000, contingency reserve 8000,deffered revenue expenditure-advertisement example 10000, pass journal entries for the treatment of these items on c's admission.?.
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