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Question
Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. In April 2017 they admitted Om as a new partner. On the date of Om’s admission the balance sheet of Leela and Meeta showed a balance of Rs 16,000 in general reserve and Rs 24,000 (Cr) in Profit and Loss Account. Record necessary journal entries for the treatment of these items on Om’s admission. The new profit sharing ratio between Leela, Meeta and Om was 5:3:2.
Solution
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Books of Leela, Meeta and Om Journal |
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Date |
Particulars |
L.F. |
Amount Rs |
Amount Rs |
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2017 |
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Jan 1 |
General Reserve A/c |
Dr. |
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16,000 |
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Profit and Loss A/c |
Dr. |
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24,000 |
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To Leela’s Capital A/c |
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|
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25,000 |
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|
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To Meeta’s Capital A/c |
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15,000 |
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(General reserve and balance in Profit and Loss credited to old partners’ capital account in their old ratio, 5:3) |
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RELATED QUESTIONS
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Liabilites |
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Assets |
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||
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Bills Payable |
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10,000 |
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Creditors |
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A |
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