Share

# X And Y Are Partners in a Firm Sharing Profits and Losses in the Ratio of 3 : 2. with Effect from 1st April, 2019 - CBSE (Arts) Class 12 - Accountancy

ConceptRetirement and Death of a Partner - Calculation of New Profit Sharing Ratio

#### Question

X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. With effect from 1st April, 2019, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of ₹ 1,50,000. Record the necessary Journal entry for the distribution of the balance in the Profit and Loss Account immediately before the change in the profit-sharing ratio.

#### Solution

Journal

 Date Particulars L.F. Debit Amount (₹) Credit Amount (₹) 2019April 1 Profit & Loss 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 P&L A/c in old ratio)

Working Notes:

WN1 Calculation of Share of Profit and Loss A/c

X's share = 1,50,000 xx 3/5 = 90,000

Y's share = 1,50,000 xx 2/5 = 60,000

Is there an error in this question or solution?

#### APPEARS IN

Solution X And Y Are Partners in a Firm Sharing Profits and Losses in the Ratio of 3 : 2. with Effect from 1st April, 2019 Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio.
S