21 :- Bootstrap and Davy Jones partners sharing profits in the ratio of 2 : 1. On 31st March, 2025, their Balance Sheet showed General Reserve of Rs 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2. Pass necessary Journal entry in each of the following alternative cases:
- When General Reserve is not to be shown in the new Balance Sheet.
- When General Reserve is to be shown in the new Balance Sheet.
22 :- Mita, Gopal and Farhan were partners sharing profits and losses in the ratio 3 : 2 : 1. On 31st March, 2018 they decided to change the profit sharing ratio to 5 : 3 : 2. On this date, the Balance Sheet showed Deferred Advertisement Expenditure Rs 30,000 and Contingency Reserve Rs 9,000.
Goodwill was valued at Rs 4,80,000.
Pass the necessary Journal entries for the above transactions in the books of the firm on its reconstitution.
23 :- X, Y, and Z are sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2025. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry.
Book values
General reserve 6,000
Profit and loss A/c (credit) 24,000
Advertisement suspense A/c 12,000
Pass an adjustment entry.
24 :- Bhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. On 31st March 2018, their Balance Sheet was as under:
The partners have decided to change their profit sharing ratio to 1 : 1 with immediate effect. For the purpose. they decided that:
(i) Investments to be valued at Rs 20,000.
(ii) Goodwill of the firm be valued at Rs 24,000.
(iii) General Reserve not to be distributed between the partners.
You are required to pass necessary Journal entries in the books of the firm. Show workings.
Question 1 to 4 (Sacrificing and Gaining Share)
Question 5 (Calculation of Old Profit – Sharing Ratio on the basis of Sacrificing and Gaining share)
Question 6 to 10 (Accounting of goodwill)
Question 11 (Calculation of New Profit – sharing ratio on the basis of Adjustment of goodwill)
Question 12 to 16 (Accounting of Reserves, Accumulated Profits and Losses)
Question 17 to 20 (Accounting of Reserves, Accumulated Profits and Losses)
Question 21 to 24 (Accounting of Reserves, Accumulated Profits and Losses)
Question 25 to 28 (Revaluation of Assets and Reassessment of Liabilities)
Question 29 to 30 (Preparation of Balance Sheet)
Question 31 to 32 (Adjustment of capital)