Question

Amar and Samar were partners in a firm sharing profits and losses in the ratio of 1 : 5. On 1.4.2021, Ganesh was admitted for 1/5^th share in the profits. On the date of Ganesh's admission, the balance sheet of Amar and Samar showed a debit balance of ₹ 60,000 in the profit and loss account. The accounting treatment for the same in the books of accounts of the furn on Ganesh's admission will be:

विकल्प

• Amar's and Samar's Capital Accounts will be debited by ₹ 10,000 and ₹ 50,000 respectively and Profit and Loss Account will be credited by ₹ 60,000.

• Profit and Loss Account will be debited by ₹ 60,000 and Amar's and Samar's Capital Accounts will be credited by ₹ 10,000 and ₹ 50,000 respectively.

• Revaluation Account will be debited by ₹ 60,000 and Profit and Loss Account will be credited by ₹ 60,000.

• Profit and Loss Appropriation Account will be debited by ₹ 60,000 and Profit and Loss Account will be credited by ₹ 60,000.

Answer 1

Amar's and Samar's Capital Accounts will be debited by ₹ 10,000 and ₹ 50,000 respectively and Profit and Loss Account will be credited by ₹ 60,000.

Explanation:

Amar's share = `1/6xx60,000` = ₹ 10,000

Samar's share = `5/6xx60,000` = ₹ 50,000