[CBSE] DK Goel Q. 40 Change in Profit Sharing Ratio Solutions Class 12 (2024-25)

Solution of Question 40 of Change in Profit sharing ratio DK Goel Class 12 CBSE (2024-25)

P, Q and R are in partnership sharing profits and losses in the ratio of 5 : 4 : 3. On 31st March 2023, their balance sheet was as follows:

Liabilities	₹	Assets	₹
Sundry Creditors	50,000	Cash at Bank	40,000
Outstanding Expenses	5,000	Sundry Debtors	2,10,000
General Reserve	75,000	Stock	3,00,000
Capital Accounts: P Q R	4,00,000 3,00,000 2,00,000	Furniture	60,000
		Plant & Machinery	4,20,000
	10,30,000		10,30,000

It was decided that with effect from 1st April 2023, the profit sharing ratio will be 4 : 3 : 2. For this purpose the following revaluation were made:

(i) Furniture be taken at 80% of its value.

(ii) Stock be appreciated by 20%.

(iii) Plant & Machinery be valued at ₹ 4,00,000.

(iv) Create provision for doubtful debts for ₹ 10,000 on debtors.

(v) Outstanding expenses be increased by ₹ 3,000.

Partners agreed that altered values are not to be recorded in the books and they also do not want to distribute the general reserve.

You are required to post a single journal entry to give effect to the above. Also prepare the revised Balance Sheet.

[Ans. Profit on Revaluation ₹ 15,000. Adjustment for Revaluation and General Reserve : Debit P by ₹ 2,500 and Credit R by ₹ 2,500. Balance Sheet Total ₹ 10,30,000.]

Solution:-