Question : A, B and C are partners sharing profits and losses in the ratio of 2: 2: 1.15th March, A died and the new ratio between B and Cis agreed at 3: 2. Give journal entries on A's death in the following cases
Question:
Investment Fluctuation Reserve appears in the books at Rs. 40,000, while Investments (market value Rs. 1,00,000) appear at Rs. 85,000.
Option 1: Investment Fluctuation Reserve of Rs. 40,000 will be credited to A, B and C in 2: 2: 1.
Option 2: Debit Investments and Credit Revaluation A/c by Rs. 15,000 .
Option 3: Revaluation Profit of Rs. 15,000 will be credited to A, B and C in 2: 2: 1.
Option 4: All of the above
Correct Answer: All of the above
Solution : ANswer = All of the above
I.F.Reserve a/c Dr 40,000
To A a/c 16,000
To B a/c 16,000
To C a/c 8,000.
(Old ratio= 2:2:1)
Investment a/c Dr 15,000
To Revaluation a/c 15,000.
Revaluation a/c Dr 15,000
To A a/c 6000
To B a/c 6,000
To C a/c 3,000
(2:2:1)
Hence, the correct option is 4.
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