12th Class Accountancy Change in Profit Sharing Ratio Among Existing Partner Question Bank Case Based - Change in Profit-Sharing Ratio Among Existing Partners

You are required to answer the following questions 11 to 12.

X, Y and Z are equal partners. On 1st April, 2021 they decided to change their profit sharing ratio. Gain of Y was 1/6 at the time of reconstitution. On that date there was a balance of General Reserve in the Balance of the firm. Partners decided not to distribute the General Reserve but an adjustment entry was passed for the same:

Y's Capital A/c Dr. 3,000

To X's Capital A/c 1,500

To Z's Capital A/c 1,500

New Profit Sharing Ratio:

A) 1:2:1

B) 2:2:1

C) 1:1:1

D) 1:2:2

Correct Answer: A

Solution :

1:2:1

X, Y and Z are equal partners. On 1st April, 2021 they decided to change their profit sharing ratio. Gain of Y was 1/6 at the time of reconstitution. On that date there was a balance of General Reserve in the Balance of the firm. Partners decided not to distribute the General Reserve but an adjustment entry was passed for the same:
Y's Capital A/c	Dr.	3,000
To X's Capital A/c			1,500
To Z's Capital A/c			1,500
New Profit Sharing Ratio: