commercemine.com

12th | Change in Profit-Sharing Ratio Among the Existing Partner | Question No.  11 To 15 |  Ts Grewal Solution 2022-2023

Question 11:


A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the Journal entry to distribute 'Workmen Compensation Reserve' of  ` 1,20,000 at the time of change in profit-sharing ratio, when:
(i) no information is given; (ii) there is no claim against it.

Answer:


(i) & (ii)

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

 

Workmen Compensation Reserve A/c

Dr.

 

1,20,000

 

 

      To A’s Capital A/c

 

 

 

60,000

 

      To B’s Capital A/c

 

 

 

36,000

 

      To C’s Capital A/c

 

 

 

24,000

 

(Being Workmen Compensation Reserve distributed)

 

 

 

 

 

Note:

In the both the cases, Workmen Compensation Reserve should be distributed in old ratio i.e., 5:3:2.

Question 12:


X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute 'Workmen Compensation Reserve' of  ` 1,20,000 at the time of change in profit-sharing ratio, when there is a claim of  ` 80,000 against it.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

Workmen Compensation Reserve A/c

Dr.

 

1,20,000

 

 

  To X’s Capital A/c

 

 

 

20,000

 

  To Y’s Capital A/c

 

 

 

12,000

 

  To Z’s Capital A/c

 

 

 

8,000

 

  To Workmen Compensation Claim A/c

 

 

 

80,000

 

(Being Adjustment of balance in Workmen Compensation Reserve A/c in old ratio)

 

 

 

 

Working Notes:

WN1 Calculation of Share of Workmen Compensation Reserve
X's share=40,000×5/10=20,000

Y's share=40,000×3/10=12,000

Z's share=40,000×2/10=8,000

Question 13:


Ashok, Bhim and Chetan who are sharing profits in the ratio of 5 : 3 : 2, decide to share profits in the ratio of 2 : 3 : 5 with effect from 1st April, 2022. Workmen Compensation Reserve appears at  ` 1,20,000 in the Balance Sheet as at 31st March, 2022 and Workmen Compensation Claim is estimated at  ` 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve. 

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2022
April 1

 

 

 

 

 

 

Workmen Compensation Reserve A/c

Dr.

 

1,20,000

 

 

Revaluation A/c

Dr.

 

30,000

 

 

    To Provision for Workmen Compensation Claim A/c

 

 

 

1,50,000

 

(Being Provision created and shortfall charged to Revaluation A/c)

 

 

 

 

 

 

 

 

 

 

 

Ashok’s Capital A/c

Dr.

 

15,000

 

 

Bhim’s Capital A/c

Dr.

 

9,000

 

 

Chetan’s Capital A/c

Dr.

 

6,000

 

 

    To Revaluation A/c

 

 

 

30,000

 

(Being Loss on revaluation transferred to Partners’ Capital A/c)

 

 

 

 

 

Question 14:


A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute 'Investments Fluctuation Reserve' of  ` 20,000 at the time of change in profit-sharing ratio, when investment (market value  ` 95,000) appears in the books at  ` 1,00,000.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

Investment Fluctuation Reserve A/c

Dr.

 

5,000

 

 

  To Investments A/c

 

 

5,000

 

(Being Adjustment for decrease in the value of investments)

 

 

 

 

 

 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

15,000

 

 

  To A’s Capital A/c

 

 

 

7,500

 

  To B’s Capital A/c

 

 

 

4,500

 

  To C’s Capital A/c

 

 

 

3,000

 

(Being Adjustment of balance in Investment Fluctuation Reserve A/c in old ratio)

 

 

 

 

Working Notes:
WN1 Calculation of Share of Investment Fluctuation Reserve
A's share=15,000×5/10=7,500

B's share=15,000×3/10=4,500

C's share=15,000×2/10=3,000

Question 15:


Nitin, Tarun and Amar are partners sharing profits equally and decide to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2022. The extract of their Balance Sheet as at 31st March, 2022 is as follows:

Liabilities

 ` 

 Assets

 ` 

Investments Fluctuation Reserve

60,000

Investments (At Cost)

4,00,000

Pass the Journal entries in each of the following situations:
(i) When its Market Value is not given;
(ii) When its Market Value is
 ` 4,00,000;
(iii) When its Market Value is
 ` 4,24,000;
(iv) When its Market Value is
 ` 3,70,000;
(v) When its Market Value is
 ` 3,10,000.

Answer:


Journal

Date
 

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2022

 

 

 

 

 

April 1

Investment Fluctuation Reserve A/c

Dr.

 

60,000

 

 

   To Nitin’s Capital A/c

 

 

 

20,000

 

   To Tarun’s Capital A/c

 

 

 

20,000

 

   To Amar’s Capital A/c

 

 

 

20,000

 

(Being Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

60,000

 

 

   To Nitin’s Capital A/c

 

 

 

20,000

 

   To Tarun’s Capital A/c

 

 

 

20,000

 

   To Amar’s Capital A/c

 

 

 

20,000

 

(Being Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

60,000

 

 

   To Nitin’s Capital A/c

 

 

 

20,000

 

   To Tarun’s Capital A/c

 

 

 

20,000

 

   To Amar’s Capital A/c

 

 

 

20,000

 

(Being Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

 

Investments A/c

Dr.

 

24,000

 

 

    To Revaluation A/c

 

 

 

24,000

 

(Being Investments revalued)

 

 

 

 

 

 

 

 

 

 

 

Revaluation A/c

Dr.

 

24,000

 

 

   To Nitin’s Capital A/c

 

 

 

8,000

 

   To Tarun’s Capital A/c

 

 

 

8,000

 

   To Amar’s Capital A/c

 

 

 

8,000

 

(Being Revaluation profit transferred to Partners’ Capital A/c)

 

 

 

 

 

 

 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

60,000

 

 

   To Investment A/c

 

 

 

30,000

 

   To Nitin’s Capital A/c

 

 

 

10,000

 

   To Tarun’s Capital A/c

 

 

 

10,000

 

   To Amar’s Capital A/c

 

 

 

10,000

 

(Being Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

60,000

 

 

Revaluation A/c

Dr.

 

30,000

 

 

     To Investment A/c

 

 

 

90,000

 

(Decrease in investments set off against IFR and balance debited to Revaluation A/c)

 

 

 

 

 

 

 

 

 

 

 

Nitin’s Capital A/c

Dr.

 

10,000

 

 

Tarun’s Capital A/c

Dr.

 

10,000

 

 

Amar’s Capital A/c

Dr.

 

10,000

 

 

      To Revaluation A/c

 

 

 

30,000

 

(Being Loss on revaluation transferred to Partners’ Capital A/c)

 

 

 

 

Ts Grewal Solution 2022-2023

Click below for more Questions

Class 12 / Volume – I

Chapter 1 – Change in Profit-Sharing Ratio Among the Existing Partner

 

Question No. 1 To 5
Question No. 5 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 27

Click on below links for 

12th TS Grewal’s Accountancy Solutions

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021