P and Q are partners in a firm sharing profits in the ratio of 3 : 2. They decided to share profits equally in future. Their Balance Sheet showed ₹50,000 in General Reserve and ₹20,000 as Profit and Loss (Dr.) Balance. The adjusted entry, if they don't wish to alter General Reserve and Profit and Loss is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Debit Q's Capital A/c by Rs 3,000, Credit P's Capital A/c by Rs 3,000
If reserves and losses are to stay in the books, the net accumulated profit is adjusted by debiting the gaining partner and crediting the sacrificing partner.
P: 3/5 − 1/2 = 1/10 (sacrifice)
Q: 1/2 − 2/5 = 1/10 (gain)
Net accumulated profit = ₹50,000 − ₹20,000 = ₹30,000
Adjustment = ₹30,000 × 1/10 = ₹3,000: Q's Capital A/c Dr. and P's Capital A/c Cr.
NCERT (2026-27 edition):
|
