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X,Y and Z are partners sharing profits and losses int the ratio 3:2:1. Y retires selling his share to X and Z for ₹16,000,₹10,000 being paid by X and ₹6,000 by Z. The profit for the year after Y's retirement is 48,000. Pass entries to (a) record the sale of Y's share to X and Z and (b) distribute the profit between X and Z. |
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Answer» ANSWERParticularsL.F.Debit (Rs.)Credit (Rs.)General Reserve A/c Dr. 1,80,000 Workmen Compensation Reserve A/c Dr. 24,000 To X’s Capital A/c 1,02,000 To Y’s Capital A/c 68,000 To Z’s Capital A/c 34,000(Being accumulated PROFIT distributed among partners in old RATIO) X’s Capital A/c Dr. 15,000 Y’s Capital A/c Dr. 10,000 Z’s Capital A/c Dr. 5,000 To Profit and Loss A/c 30,000(Being debit balance in profit and loss A/c distributed among partners in old ratio) Working note:1. Calculation of share in credit balance of ReserveTotal credit balance of Reserves = General Reserve + WCF = 1,80,000 + 24,000 = 2,04,000 X’s share = 2,04,000 X 3/6 = Rs. 1,02,000Y’s share = 2,04,000 X 2/6 = Rs. 68,000Z’s share = 2,04,000 X 1/6 = Rs. 34,0002. Calculation of share in debit balance of Profit and Loss A/cX’s share = 30,00 X 3/6 = Rs. 15,000Y’s share = 30,000 X 2/6 = Rs. 10,000Z’s share = 30,000 X 1/6 = Rs. 5,000Note: Employer Provident FUND will not be distributed as it is a liability and not accumulated profit. |
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