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Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi?
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Meeta Gopal and Farhan were partners sharing profits and losses in the...
Deferred Advertisement Expenditure:
Deferred Advertisement Expenditure is the amount spent on advertising activities that provide benefits over a period of time rather than immediately. In the balance sheet, this expenditure is shown as an asset if it is expected to provide future benefits.
Reason for Deferring Advertisement Expenditure:
- Meeta Gopal and Farhan decided to change their profit sharing ratio on 31 March 2022.
- The balance sheet on this day showed a balance of deferred advertisement expenditure.
Accounting Treatment:
- The deferred advertisement expenditure is an intangible asset that represents the unexpired portion of the advertisement expenditure.
- When the profit sharing ratio changes, the unexpired portion of the advertisement expenditure needs to be adjusted to reflect the new ratios.
- The adjustment is made by transferring the amount from the old partners' capital accounts to the new partners' capital accounts in the new profit sharing ratio.
Journal Entry:
- The journal entry to adjust the deferred advertisement expenditure is:
- Debit: New Partners' Capital Accounts in the new profit sharing ratio
- Credit: Old Partners' Capital Accounts in the old profit sharing ratio
Impact on Balance Sheet:
- After the adjustment, the balance sheet will reflect the correct allocation of the deferred advertisement expenditure based on the new profit sharing ratio.
- This ensures that the financial statements accurately represent the partnership's financial position and the partners' capital interests.
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Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi?
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Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi?.
Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Meeta Gopal and Farhan were partners sharing profits and losses in the ratio 3 ratio 2 ratio 1 on 31 March 2022 they decided to change the profit sharing ratio 25 ratio 3 ratio 2 on this day the balance sheet shows the balance deferred advertisement expendi?.
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