Question

Khushi and Sukhi are partners in a firm sharing profits in the ratio of 5 : 4. On April 1, 2024, they admit Muskan as a new partner and the new ratio is agreed at 3 : 2 : 1. On that date there was a balance of ₹ 63,000 in the profit and loss account and a balance of ₹ 45,000 in general reserve. Record the necessary journal entries.

Answer 1

Journal Entriy
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2024
April 1	General Reserve A/c   ...Dr.		45,000
	To Khushi’s Capital A/c			25,000
	To Sukhi’s Capital A/c			20,000
	(The transfer of the balance of General Reserve to old partner’s capital accounts in old ratio on the admission of Muskan)
April 1	Profit & Loss A/c   ....Dr.		63,000
	To Khushi’s Capital A/c			35,000
	To Sukhi’s Capital A/c			28,000
	(The transfer of the balance of Accumulated Profits to old partner’s capital accounts in old ratio on the admission of Muskan)