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Question
Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3:2:1. Their balance sheet as on 31st March, 2017 is as follows:
| Liabilities | ₹ | ₹ | Assets | ₹ |
| Capital accounts: | 1,30,000 | Buildings | 1,10,000 | |
| Akash | 40,000 | Vehicle | 30,000 | |
| Mugesh | 60,000 | Stock in trade | 26,000 | |
| Sanjay | 30,000 | Debtors | 25,000 | |
| Profit and loss appropriation A/c |
12,000 | Cash in hand | 15,000 | |
| General reserve | 24,000 | |||
| Workmen compensation fund | 18,000 | |||
| Bills payable | 22,000 | |||
| 2,06,000 | 2,06,000 |
Pass journal entry to transfer accumulated Profit and prepare the capital account of the partners.
Solution
| Particulars | Dr. | Cr. |
| Profit and loss appropriation A/c General Reserve A/c Workmen Compensation A/c To Akash Capital A/c To Mugesh Capital A/c To Sanjay Capital A/c (Undistributed profit transfer to Capital) |
12,000 24,000 18,000 |
27,000 18,000 9,000 |
| Dr. | Capital Account | Cr. | |||||
| Particulars | Akash ₹ | Mugesh ₹ | Sanjay ₹ | Particulars | Akash ₹ | Mugesh ₹ | Sanjay ₹ |
| To Balance c/d | 67,000 | 78,000 | 39,000 | By Balance b/d | 40,000 | 60,000 | 30,000 |
| By Undistributed Profit | 27,000 | 18,000 | 9,000 | ||||
| 67,000 | 78,000 | 39,000 | 67,000 | 78,000 | 39,000 | ||
Working note:
`54,000 xx 3/6 = 27,000`
`54,000 xx 2/6 = 18,000`
`54,000 xx 1/6 = 9,000`
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