A and V are partners in a firm sharing profits and losses in 3:1 ratio. On 1.1.2025 they admitted R as a new partner. On R’s admission the profit and loss account of A and V showed a debit balance of Rs. 40,000. The journal entry for the treatment of same will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A’s Capital A/c Dr. Rs. 30,000 and V’s Capital A/c Dr. Rs. 10,000, To Profit and Loss A/c Rs. 40,000
A debit balance of the Profit and Loss Account is an accumulated loss of the old firm. R had no part in it, so it is written off to the old partners only, in their old ratio of 3:1, before R comes in.
A's share = Rs. 40,000 × 3/4 = Rs. 30,000
V's share = Rs. 40,000 × 1/4 = Rs. 10,000
The partners' capital accounts are debited because they bear the loss, and the Profit and Loss Account is credited to close its debit balance:
A's Capital A/c Dr. 30,000
V's Capital A/c Dr. 10,000
To Profit and Loss A/c 40,000
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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