X and Y were partners in a firm sharing profits and losses in the ratio of 2 : 1. Z was admitted for 1/3rd share in the profits. On the date of Z’s admission, the Balance Sheet of X and Y showed General Reserve of ₹ 2,50,000 and a credit balance of ₹ 50,000 in Profit and Loss Account. Pass necessary journal entries on the treatment of these items on Z’s admission.

X and Y were partners in a firm sharing profits and losses in the rati

1.	X and Y were partners in a firm sharing profits and losses in the ratio of 2 : 1. Z was admitted for 1/3rd share in the profits. On the date of Z’s admission, the Balance Sheet of X and Y showed General Reserve of ₹ 2,50,000 and a credit balance of ₹ 50,000 in Profit and Loss Account. Pass necessary journal entries on the treatment of these items on Z’s admission.
Answer» PROFIT SHARING refers to various incentive plans introduced by businesses that provide direct or indirect PAYMENTS to employees that depend on COMPANY's PROFITABILITY in addition to employees' regular salary and bonuses. In publicly traded companies these plans typically amount to allocation of shares to employees.

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