Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. On Is Jan-Solution

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 Q.28. Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. On Is Jan. 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

DateParticularsL.F.Amount(Dr.)Amount(Cr.)
2017General Reserve A/cDr.16,000
Jan,1Profit and Loss A/cDr.24,000
    To Leela’s capital A/c (10,000+15,000)25,000
    To Meeta’s capital A/c(6,000+11,000)15,000
(General reserve and balance in Profit and Loss credited to old partners’ capital account in their old ratio 5:3)
Partners share in General Reserve

Leela  = 5/8 X 16,000

           = Rs 10,000

Meeta = 3/8 X 16,000

           = Rs 6,000

Partners share in Profit and loss (Cr.) A/c

Leela  = 5/8 X 24,000

           = Rs 15,000

Meeta = 3/8 X 24,000

           = Rs 11,000

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