Please solve this as quick as possible!!!
Q. 14 X, Y & Z are partners sharing profit and losses in the ratio 7 : 5 : 4. Their balance sheet as at 31st March 2017 stood as :
Partners decided that with effect from 1st April 2017 that will share profit and loss in the ratio of 3 : 2 : 1 for this purpose goodwill of the firm was valued at Rs. 3,00,000. The partners neither want to record the goodwill nor want to distribute the general reserve and profit. Pass a Single Journal Entry to record the change and prepare the revised Balance Sheet.
Dear Student
All adjustments are to be done from capital accounts of the partners,
Regards
All adjustments are to be done from capital accounts of the partners,
| Balance sheet | |||
| Liabilities | Amount (in Rs) | Assets | Amount (in Rs) |
| Sundry Assets | 1,400,000 | ||
| General Reserve | 130,000 | ||
| P & L A/c | 50,000 | ||
| Creditors | 260,000 | ||
| Capital | |||
| X | 390,000 | ||
| Y | 290,000 | ||
| Z | 280,000 | ||
| 1,400,000 | 1,400,000 | ||
| Calculation of Sacrificing and Gaining Partners | |||
| X | Y | Z | |
| Old Ratio | 7/16 | 5/16 | 4/16 |
| 3/6 | 2/6 | 1/6 | |
| - 3/48 | - 1/48 | 4/48 | |
| Gaining | Gaining | Sacrificing | |
| Journal |
||||
| Date | Particulars | Debit | Credit | |
| X's Capital A/c | Dr. | 18,750 | ||
| Y's Capital A/c | Dr. | 6,250 | ||
| To Z's capital A/c (3,00,000 x 4/48) | 25,000 | |||
| (Being total loss of Z on change in PSR, adjusted on the basis of gaining and sacrificing partners, Gaining ratio X |
||||
| Statement of Working for Reserves | |||||
| Particulars | X | Y | Z | Total | |
| Credit in Old ratio | |||||
| General Reserve | 56,875 | 40,625 | 32,500 | 130,000 | |
| P & Loss A/c | 21,875 | 15,625 | 12,500 | 50,000 | |
| Total | 78,750 | 56,250 | 45,000 | 180,000 | |
| Debit in New Ratio | |||||
| General Reserve | 65,000 | 43,333 | 21,667 | 130,000 | |
| P & Loss A/c | 25,000 | 16,667 | 8,333 | 50,000 | |
| Total | 90,000 | 60,000 | 30,000 | 180,000 | |
| Difference : to be credited or (debited) | (11,250) | (3,750) | - | 15,000 | - |
| Debit | Debit | Credit | |||
| Partner's Capital A/c | |||||||
| Particulars | X | Y | Z | Particulars | X | Y | Z |
| Z's Capital A/c (Goodwill) | 18,750 | 6,250 | Balance b/d | 420,000 | 300,000 | 240,000 | |
| Z's Capital A/c (Reserves and profit and loss) | 11,250 | 3,750 | X's capital A/c | 18,750 | |||
| Y's capital A/c | 6,250 | ||||||
| X's capital A/c | 11,250 | ||||||
| Bal C/d | 390,000 | 290,000 | 280,000 | Y's capital A/c | 3,750 | ||
| 420,000 | 300,000 | 280,000 | 420,000 | 300,000 | 280,000 | ||
Regards