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The firm with X, Y and Z as partners earned a profit of ₹ 3,00,000 during the year ended 31st March, 2011. 20% of this profit was to be transferred to the General Reserve. - Accounts

Question

The firm with X, Y and Z as partners earned a profit of ₹ 3,00,000 during the year ended 31st March, 2011. 20% of this profit was to be transferred to the General Reserve. Pass the necessary journal entry for the same.

Journal Entry

Solution

Date	Particulars	L.F	Debit ₹	Credit ₹
2011
March 31	Profit and Loss Appropriation A/c ...Dr.		60,000	-
	To General Reserve A/c		-	60,000
	(Being 20% of the profit transferred to the general reserve.)