Question

Dr.	PARTNERS' CAPITAL ACCOUNTS						Cr.
Particulars	Ram	George	Om	Particulars	Ram	George	Om
To Revaluation A/c	32,000	24,000	...	By Balance b/d	5,00,000	6,00,000	...
To Balance c/d	9,48,000	8,36,000	...	By Bank A/c	...	...	8,00,000
				By Premium for Goodwill A/c	2,40,000	80,000	...
				By General Reserve A/c	2,40,000	1,80,000	...
	9,80,000	8,60,000	8,00,000		9,80,000	8,60,000	8,00,000

On the basis of the above Partners' Capital Account, answer the questions.

1. What is the old profit-sharing ratio and sacrificing ratio?
2. The firm incurred a ______ (profit/loss) of ₹ ______ in the Revaluation A/c.
3. Pass the Journal entry if Om is admitted for 1/4th share and the partners decide to retain the General Reserve in the new Balance Sheet?

Answer 1

(a) Derived from General Reserve distribution between Ram and George (2,40,000 : 1,80,000) = 4 : 3

(b) The firm incurred a loss of ₹ 56,000 in the Revaluation A/c.

(c) 

Journal entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Om's Current A/c   ...Dr.		1,05,000
	To Ram's Capital A/c			78,750
	To George's Capital А/c			26,250
	(Adjustment made for General Reserve in sacrificing ratio of 3 : 1.)

Working note:

Total General Reserve Value: 2,40,000 + 1,80,000 = 4,20,000

Incoming Partner's (Om's) Gaining Share: `1/4`

Om's Share of Reserve Contribution: `4,20,000 xx 1/4 = 1,05,000`

Distribution to Sacrificing Partners in Sacrificing Ratio (3 : 1):

Ram: `1,05,000 xx 3/4 = 78,750`

George: `1,05,000 xx 1/4 = 26,250`