Question 11:Nidhi, Vridhi and Kavya are partners sharing profits and losses in the ratio of 2:2:1.From 1st April, 2026, they decide to change the profit-sharing ratio. They pass the following adjustment entry for goodwill in the books:
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JOURNAL |
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Date |
Particulars |
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LF. |
Dr.) |
Cr.) |
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2026 April 1 |
Nidhi's Current A/c (2,00,000 x 3/25) |
Dr. |
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24,000 |
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Kavya's Current A/c (2,00,000 × 2/25) |
Dr. |
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16,000 |
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To Vridhi’s Current A/c (2,00,000 × 5/25) |
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40,000 |
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(Goodwill adjusted on change in profit-sharing ratio) |
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What will be the new profit-sharing ratio of partners assuming capital of partners are fixed?
Answer:
Old Ratio=2:2:1
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Nidhi |
= |
2/5 |
+ |
3/25 |
= |
10+3/25 |
= |
13/25 |
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Vridhi |
= |
2/5 |
- |
5/25 |
= |
10 -5/25 |
= |
5/25 |
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Kavya |
= |
1/5 |
+ |
2/25 |
= |
5+2/25 |
= |
7/25 |
New Profit-sharing Ratio-13:5:7
Question 12:
Nitya and Anand are partners in a firm sharing profits and losses in the ratio of 3 : 2. With effect from 1st April, 2026, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of ₹1,50,000. Record the necessary Journal entry for the distribution of the balance in the Profit and Loss Account immediately before the change in the profit-sharing ratio.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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2026 |
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To Nitya’s Capital A/c |
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90,000 |
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To Anand’s Capital A/c |
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60,000 |
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(Being Adjustment of balance in P&L A/c in old ratio) |
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Working Notes:
WN1Calculation of Share of Profit and Loss A/c
Nisha's share=1,50,000×3÷5=90,000
Anand's share=1,50,000×2÷5=60,000
Question 13:
Om and Shiv are partners in a firm sharing profits in the ratio of 4 : 1. They decided to share future profits in the ratio of 3 : 2 w.e.f. 1st April, 2026. On that day, Profit and Loss Account showed a debit balance of ₹ 1,00,000. Pass Journal entry to give effect to the above.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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2026 |
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April 1 |
Om’s Capital A/c |
Dr. |
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80,000 |
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Shiv’s Capital A/c |
Dr. |
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20,000 |
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To Profit & Loss A/c |
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1,00,000 |
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(Being Profit & Loss distributed) |
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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 '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)
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Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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Workmen Compensation Reserve A/c |
Dr. |
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1,20,000 |
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To A’s Capital A/c |
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60,000 |
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To B’s Capital A/c |
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36,000 |
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To C’s Capital A/c |
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24,000 |
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(Being Workmen Compensation Reserve distributed) |
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Note:
In the both the cases, Workmen Compensation Reserve should be distributed in old ratio i.e., 5:3:2.
Question 15:
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:
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Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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Workmen Compensation Reserve A/c |
Dr. |
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1,20,000 |
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To X’s Capital A/c |
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20,000 |
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To Y’s Capital A/c |
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12,000 |
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To Z’s Capital A/c |
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8,000 |
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To Workmen Compensation Claim A/c |
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80,000 |
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(Being Adjustment of balance in Workmen Compensation Reserve A/c in old ratio) |
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Working Notes:
WN1Calculation 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
Ts Grewal Solution 2026-2027
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Class 12 / Volume – I
Chapter 3 – Change in Profit-Sharing Ratio Among the Existing Partner