# Pass Necessary Journal Entries Regarding Adjustment of Reserve and Accumulated Profit/Loss. - Accountancy

Journal Entry

X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2019, they admit Z as a partner for 1/5th share in profits. On that date, there was a balance of ₹ 1,50,000 in General Reserve and a debit balance of ₹ 20,000 in the Profit and Loss Account of the firm. Pass necessary Journal entries regarding adjustment of reserve and accumulated profit/loss.

#### Solution

 Journal Date Particulars L.F. Debit Amount (₹) Credit Amount (₹) 2019April 1 General Reserve A/c Dr. 1,50,000 To X’s Capital A/c 90,000 To Y’s Capital A/c 60,000 (Adjustment of balance in General Reserve A/c in old ratio) X’s Capital A/c Dr. 12,000 Y’s Capital A/c Dr. 8,000 To Profit and Loss A/c 20,000 (Adjustment of debit balance in P&L A/c in old ratio)

Working Notes:
WN1 Calculation of Share of General Reserve
X's Share = 1,50,000 x 3/5 = 90,000

Y's Share = 1,50,000 x 2/5 = 60,000

WN2 Calculation of Share of Debit Balance in P&L A/c

X's Share = 20,000 x 3/5 = 12,000

Y's Share = 20,000 x 2/5 =  8,000

Concept: Adjustment for Accumulated Profits and Losses
Is there an error in this question or solution?

#### APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 5 Admission of a Partner
Exercise | Q 59 | Page 93