Question :
R, B and L were partners in a firm sharing profits and losses in the ratio equally. With effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3:2:1. On that date their Balance Sheet showed a debit balance of Rs. 24,000 in Profit and Loss Account and a balance of Rs. 1,44,000 in General Reserve.
It was also agreed that:
(a) The goodwill of the firm be valued at Rs. 1,80,000.
(b) The Land (having book value of Rs. 3,00,000) will be valued at Rs. 4,80,000.
Treatment of undistributed losses is?
Option 1: R debited Rs 12,000, B debited Rs 8000 and L debited Rs 4000
Option 2: R debited Rs 8000, B debited Rs 8000 and L debited Rs 8000
Option 3: R gain Rs 12,000 and B sacrifice Rs 8,000 and L sacrifice Rs 4,000
Option 4: None of the above
Correct Answer: R debited Rs 8000, B debited Rs 8000 and L debited Rs 8000
Solution : Answer = R debited Rs 8000, B debited Rs 8,000 and L debited Rs 8,000
R's Capital A/c Dr 8000
B's Capital A/c Dr 8000
L's Capital A/c Dr 8000
To Profit and Loss A/c 24000 Hence, the correct option is 2.
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