29 :- X, Y and Z were equal partners in a firm. On 31st March, 2025 their balance sheet was as follows:
On the above date, Z retires from the firm and X and Y decided to share profits in the ratio of 3:2. Partners decided to show accumulated profits, losses and reserves in the balance sheet of the reconstituted firm at their original values.
Pass an adjustment entry for the treatment of accumulated profits, losses and reserve.
Solution :-
(a) Calculation of gaining/sacrificing share of partners
New share – old share
X : 3/5 – 1/3 = 4/15 (gain)
Y : 2/5 – 1/3 = 1/15 (gain)
(b) Calculation of proportionate amount of share of gain on revaluation
X = 45,000 x 4/15 = Rs 12,000 (debit)
Y = 45,000 x 1/15 = Rs 3,000 (debit)
Z = 45,000 x 1/3 = Rs 15,000 (credit)