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  3. 12th Class
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  5. Change in Profit Sharing Ratio Among Existing Partner

12th Class Accountancy Change in Profit Sharing Ratio Among Existing Partner Question Bank MCQs - Reconstitution Of a Partnership Firm : Change in Profit Sharing Ratio

  • question_answer
    X and Y shared profits and losses in the ratio of 3 : 2. With effect from 1st April, 2020, they agreed to share profits equally. Goodwill of the firm was valued at Rs. 60,000. The adjustment entry will be:

    A)  Y's Capital A/c             Dr.  6,000           To X's Capital A/c                     6,000

    B)  X's Capital A/c             Dr.  6,000           To Y's Capital A/c                    6,000

    C)  X's Capital A/c             Dr.    600            To Y's Capital A/c                      600

    D)   Y's Capital A/c             Dr.    600            To X's Capital A/c                      600

    Correct Answer: A

    Solution :

    [a] Y's Capital A/c            Dr.  6,000              To X's Capital A/c                    6,000
    Hint: Sacrificing/(Gaining) Share = Old Share - New Share
    X= \[\frac{3}{5}-\frac{1}{2}=\frac{6-5}{10}=\frac{1}{10}\] Sacrifice
    Y= \[\frac{2}{5}-\frac{1}{2}=\frac{4-5}{10}=\left( \frac{1}{10} \right)\]Gain
    Y's Capital A/c (60,000 \[\times \]1/10)                            Dr. 6,000
         To X's Capital A/c (60,000 \[\times \]1/10)   6,000


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