{"id":135484,"date":"2023-03-31T16:09:59","date_gmt":"2023-03-31T10:39:59","guid":{"rendered":"https:\/\/www.mapsofindia.com\/my-india\/?p=135484"},"modified":"2023-03-31T16:09:59","modified_gmt":"2023-03-31T10:39:59","slug":"l-m-and-n-are-partners-sharing-profits-in-the-ratio-of-5-3-2-they-decided-to-share-profits-equally-with-effect-from","status":"publish","type":"post","link":"https:\/\/www.mapsofindia.com\/my-india\/quiz\/l-m-and-n-are-partners-sharing-profits-in-the-ratio-of-5-3-2-they-decided-to-share-profits-equally-with-effect-from","title":{"rendered":"L, M and N are partners sharing profits in the ratio of 5: 3: 2. They decided to share profits equally with effect from…"},"content":{"rendered":"

These are the options for the Question: L, M and N are partners sharing profits in the ratio of 5: 3: 2. They
\ndecided to share profits equally with effect from 1″ April, 2022. On that date, there was a balance of % 2,00,000 in General Reserve and 4 credit balance of 2 4,00,000 in the Profit and Loss Account. The Journal Entry for the above on account of change in profit sharing ratio will be:<\/h3>\n

JOURNAL
\nParticulars Debit Credit
\nAmt. (%) | Amt. (%)
\n(A) | General Reserve A\/c Dr. | 2,00,000
\nTo Profit and Loss A\/e 2,00,000
\n(B) | M\u2019s Capital A\/c Dr. 80,000
\nN\u2019s Capital A\/c Dr. 20,000
\nTo L’s Capital A\/c 1,00,000
\n(C) | General Reserve A\/c Dr. | 2,00,000
\nProfit and Loss A\/c Dr. | 4,00,000
\nTo L\u2019s Capital A\/c 2,00,000
\nTo M\u2019s Capital A\/c 2,00,000
\nTo N\u2019s Capital A\/c 2,00,000
\n(D)_| General Reserve A\/c Dr. | 2,00,000
\neo Profit and Loss A\/e Dr. | 4,00,000
\nTo L\u2019s Capital A\/c 3,00,000
\nTo M\u2019s Capital A\/e 1,80,000
\nTo N\u2019s Capital A\/c 1,20,000<\/h4>\n

 <\/p>\n

The correct answer is (D): The journal entry for the change in profit sharing ratio will be: Particulars Debit Credit General Reserve A\/c Dr. 2,00,000 Profit and Loss A\/c Dr. 4,00,000 To M\u2019s Capital A\/c 1,80,000 (5\/10th of 3,60,000) To N\u2019s Capital A\/c 1,20,000 (3\/10th of 3,60,000) To L\u2019s Capital A\/c 3,00,000 (2\/10th of 3,60,000) Explanation: As the partners have decided to share profits equally with effect from 1st April, 2022, the new profit sharing ratio will be 5:5:5. This means that each partner’s share in the profits will be equal. Therefore, the total profits will be divided into five equal parts and each partner will get one-fifth of the profits. In this case, the General Reserve of Rs. 2,00,000 will not be distributed among the partners, as it is a reserve and not a profit. Hence, it will be transferred to the partners’ Capital Accounts in the old profit sharing ratio of 5:3:2. Also, the credit balance in the Profit and Loss Account of Rs. 4,00,000 will be distributed among the partners in the new profit sharing ratio of 5:5:5. Therefore, M will get 5\/10th of Rs. 4,00,000, i.e., Rs. 1,80,000, N will get 3\/10th of Rs. 4,00,000, i.e., Rs. 1,20,000 and L will get 2\/10th of Rs. 4,00,000, i.e., Rs. 2,00,000.<\/p>\n","protected":false},"excerpt":{"rendered":"

These are the options for the Question: L, M and N are partners sharing profits in the ratio of 5: 3: 2. They decided to share profits equally with effect from 1″ April, 2022. On that date, there was a balance of % 2,00,000 in General Reserve and 4 credit balance of 2 4,00,000 in […]<\/p>\n","protected":false},"author":21842,"featured_media":132233,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12119],"tags":[],"class_list":{"0":"post-135484","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-quiz"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/posts\/135484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/users\/21842"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/comments?post=135484"}],"version-history":[{"count":1,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/posts\/135484\/revisions"}],"predecessor-version":[{"id":135488,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/posts\/135484\/revisions\/135488"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/media\/132233"}],"wp:attachment":[{"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/media?parent=135484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/categories?post=135484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mapsofindia.com\/my-india\/wp-json\/wp\/v2\/tags?post=135484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}