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 3:2. Their Balance Sheet as at 31st March, 2017 was as follows: Capital and LiabilitiesRsAssetsRsCreditors42,000Current Assets2,00,000Employee's Provident Fund20,000Investment50,000Contingency Reserve30,000Furniture20,000Profit & Loss Account45,000Machinery90,000Workmen Compensation Reserve18,000Advertisement ExpenditureInvestment Fluctuation Reserve25,000(Deferred RevenueCapitals: X 1,20,000Expenditure)20,000 Y 80,000––––––––2,00,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,80,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,80,000–––––––––– They admit Z into partnership on 1st April, 2017 and the new profit sharing ratio is agreed at 2 : 1 : 1. It is estimated that: (i) Claim on account of Workmen's Compensation is estimated at Rs 10,000. (ii) Market value of Investments is Rs 46,000. Give necessary journal entries to adjust accumulated profits and losses.
Answer» X and Y were partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2017 was as follows: $\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 42, 000 & Current Assets & 2, 00, 000 Employee's Provident Fund & 20, 000 & Investment & 50, 000 Contingency Reserve & 30, 000 & Furniture & 20, 000 Profit & Loss Account & 45, 000 & Machinery & 90, 000 Workmen Compensation Reserve & 18, 000 & Advertisement Expenditure Investment Fluctuation Reserve & 25, 000 & (Deferred Revenue Capitals: X 1, 20, 000 & Expenditure) & 20, 000 Y 80, 000 - ------ - & 2, 00, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 80, 000 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 80, 000 - -------- - \end{matrix}$ They admit Z into partnership on 1st April, 2017 and the new profit sharing ratio is agreed at 2 : 1 : 1. It is estimated that: (i) Claim on account of Workmen's Compensation is estimated at Rs 10,000. (ii) Market value of Investments is Rs 46,000. Give necessary journal entries to adjust accumulated profits and losses.

X and Y were partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2017 was as follows: Capital and LiabilitiesRsAssetsRsCreditors42,000Current Assets2,00,000Employee's Provident Fund20,000Investment50,000Contingency Reserve30,000Furniture20,000Profit & Loss Account45,000Machinery90,000Workmen Compensation Reserve18,000Advertisement ExpenditureInvestment Fluctuation Reserve25,000(Deferred RevenueCapitals: X 1,20,000Expenditure)20,000 Y 80,000––––––––2,00,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,80,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,80,000–––––––––– They admit Z into partnership on 1st April, 2017 and the new profit sharing ratio is agreed at 2 : 1 : 1. It is estimated that: (i) Claim on account of Workmen's Compensation is estimated at Rs 10,000. (ii) Market value of Investments is Rs 46,000. Give necessary journal entries to adjust accumulated profits and losses.

Answer»

X and Y were partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2017 was as follows:

$\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 42, 000 & Current Assets & 2, 00, 000 Employee's Provident Fund & 20, 000 & Investment & 50, 000 Contingency Reserve & 30, 000 & Furniture & 20, 000 Profit & Loss Account & 45, 000 & Machinery & 90, 000 Workmen Compensation Reserve & 18, 000 & Advertisement Expenditure Investment Fluctuation Reserve & 25, 000 & (Deferred Revenue Capitals: X 1, 20, 000 & Expenditure) & 20, 000 Y 80, 000 - ------ - & 2, 00, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 80, 000 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 80, 000 - -------- - \end{matrix}$

They admit Z into partnership on 1st April, 2017 and the new profit sharing ratio is agreed at 2 : 1 : 1. It is estimated that:

(i) Claim on account of Workmen's Compensation is estimated at Rs 10,000.

(ii) Market value of Investments is Rs 46,000.

Give necessary journal entries to adjust accumulated profits and losses.

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