A,B and C were partners sharing profits and losses 2:3:1. The position of the firm as on 1-4-2014 and 31-3-2015 was : 01/04/2014 31/03/2015 01/04/2014 31/03/2015 A's Capital B's Capital C's Capital General Reserve Capital Reserve Bank Overdraft Fixed Assets Debtors Stock Loans and Advances 30,000 40,000 20,000 18,000 28,000 40,000 36,000 37,000 10,000 9,000 20,000 65,000 72,000 32,000 22,000 30,000 12,000 12,000 10,000 5,000 1,22,000 1,52,000 1,52,000 On 1st April, 2014 the partners decided to change their profit and loss sharing ratio to 2:4:1. 1,22,000 Goodwill was valued at $ 42,000. No entries were, however, passed to give effect to this change. Pass Journal entries in the books of the firm as on 31st March, 2015 and prepare Capital Accounts of the Partners.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
![A,B and C were partners sharing profits and losses 2:3:1. The position of the firm as on 1-4-2014 and 31-3-2015 was :
01/04/2014 31/03/2015
01/04/2014 31/03/2015
A's Capital
B's Capital
C's Capital
General Reserve
Capital Reserve
Bank Overdraft
Fixed Assets
Debtors
Stock
Loans and Advances
20,000
18,000
30,000
28,000
40,000
36,000
40,000
37,000
65,000
22,000
10,000
9,000
20,000
30,000
72,000
32,000
12,000
12,000
10,000
1,22,000
5,000
1,52,000
On 1st April, 2014 the partners decided to change their profit and loss sharing ratio to 2:4:1.
1,22,000
1,52,000
Goodwill was valued at $ 42,000. No entries were, however, passed to give effect to this change.
Pass Journal entries in the books of the firm as on 31st March, 2015 and prepare Capital Accounts
of the Partners.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F444634cf-7e9b-4b64-9025-562567e02c42%2Fe192e652-8ae3-4595-9d81-bc6579d0ef1a%2Fam2ooah_processed.jpeg&w=3840&q=75)
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