Answer – 1

To get the adjustment entry done, first need to find out the distribution of accumulated
profit/loss. Since books of account are not to be affected due to change in profit sharing ratio,
hence an adjustment entry need to be passed:
Calculation of sacrificed/gained profit share of partners due to change in profit-sharing
ratio:
A B C
i. Old Profit Share 52500 31500 21000
ii. New Profit Share 21000 31500 52500
______ ____ _____
iii. Sacrificed/(Gained)Profit share (31500) Nil 31500

Hence below adjustment entry will be passed:

JOURNAL
Date Particulars L.F. Dr. Cr.
2019 C’s Capital A/c Dr 31,500
April 1 To A’s Capital A/c 31,500
(Adjustment of General
Reserve because of change in
the profit-sharing ratio)
Answer – 2
CALCULATION OF NORMAL PROFIT
Year Adjustment Normal Profit

2013-14 50,000
2014-15 40,000+10,000(Abnormal Loss) 50,000
2015-16 75,000
2016-17 (25,000)
2017-18 50,000

Total Normal Profit 2,00,000

Average Profit = Total Normal Profit/ Number Of Years = Rs 2,00,000 = Rs 40,000

5
Goodwill = Average Profit × Number of years’ Purchase
= Rs 40,000 × 3 = Rs 1,20,000
Answer – 3 (a)

Realisation Account

Dr. Cr.
Particulars Rs Particulars Rs
To Sundry Asset A/c By Sundry Liabilities A/c
Debtors 3,40,000 Creditors 1,50,000
Stock 1,50,000 Bank A/c:
Furniture 4,60,000 Debtors 3,23,000
Machinery 8,20,000 17,70,000 Stock 65,000
To Bank A/c 1,50,000 Machinery 74,000 4,62,000
Hanif’s Current A/c 8,000 Hanif’s Current A/c(Stock) 67,500
(Realisation Expenses) Jubed’s Current A/c(Furniture) 1,35,000
Loss transferred to:
Hanif’s Current A/c 7,42,333
Jubed’s Current A/c 3,71,167 11,13,500
19,28,000 19,28,000
Answer – 3 (b)
Calculation of Gaining Ratio:
X:Y:Z
Old Ratio = 1 : 3 : 1
2 10 5
5:3:2
10
New Ratio = 3:2
Gaining Ratio = New Ratio – Old Ratio
Y’s Gain = 3 _ 3 = 3
5 10 10
Z’s Gain = 2 _ 2 = 2
5 10 10

Gaining Ratio = 3:2