Practicing Success
Practicing Success
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| X, and Y are the partners sharing profits in the ratio of 5:4 and they decided on their new ratio 2:1. At the time of reconstitution of the firm, it has a balance of General Reserve of Rs 9,000. How will it be treated? |
Credited to X and Y's Capital a/c - 6,000 and 3000 respectively Credited to X and Y's capital a/c - 5,000 and 4000 respectively Rs 9,000 will be shown in new Balance Sheet Debited to X and Y's Capital a/c - 5000 and 4000 respectively |
| Credited to X and Y's capital a/c - 5,000 and 4000 respectively |
| A- 9000*5/9 = 5000 B - 9000*4/9 = 4000 |
