(Distribution of old reserves) A and B share profits in 5 : 3 ratio. O

1.	(Distribution of old reserves) A and B share profits in 5 : 3 ratio. On 31st March, 2018 they had 20,000 in general reserve and 8,000 in (Dr.) Profit & Loss Alc. The new ratio with effect from 1st April, 2018 will be 3 : 2. It was decided by partners that before bringing the new ratio into force the old profit (Dr.) and general reserve should be distributed. Journalise (Ans. A (Cr.) 7.500: B (Cr.) 4,500)
Answer» Answer: EXPLANATION: DISTRIBUTION OF PROFIT =============================================================== BY GENERAL RESERVE 20,000.00 LESS LOSS (DR P&La/C 8,000.00 NET PROFIT AVAILABLE 12,000.00 TO A = 5/8 7,500.00 TO B = 3/8 4,500.00 ============================================================== TOTAL 12,000.00 12,000.00 ============================================================== NOTE: OLD BALANCE OF PROFIT SHOULD BE DISTRIBUTED IN THE OLD PROFIT SHARING RATIO

(Distribution of old reserves) A and B share profits in 5 : 3 ratio. On 31st March, 2018 they had 20,000 in general reserve and 8,000 in (Dr.) Profit & Loss Alc. The new ratio with effect from 1st April, 2018 will be 3 : 2. It was decided by partners that before bringing the new ratio into force the old profit (Dr.) and general reserve should be distributed. Journalise (Ans. A (Cr.) 7.500: B (Cr.) 4,500)

Answer»

Answer:

EXPLANATION:

DISTRIBUTION OF PROFIT

===============================================================

BY GENERAL RESERVE 20,000.00

LESS LOSS (DR P&La/C 8,000.00

NET PROFIT AVAILABLE 12,000.00

TO A = 5/8 7,500.00

TO B = 3/8 4,500.00

==============================================================

TOTAL 12,000.00 12,000.00

==============================================================

NOTE:

OLD BALANCE OF PROFIT SHOULD BE DISTRIBUTED IN THE OLD PROFIT SHARING RATIO

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