P, Q and R were on partnership terms sharing and losses in the ratio of 6 : 3 : 1. They decide to take S into partnership with effect from 1st April,

Monjur Alahi

P, Q and R were on partnership terms sharing and losses in the ratio of 6 : 3 : 1. They decide to take S into partnership with effect from 1st April, 2019. The new profit-sharing ratio between P, Q, R and S will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing a single adjustment entry: `{:(,"Book Values (RS)"),("General Reserve","1,80,000"),("Contingency Reserve","30,000"),("Profit and Loss A//C (Cr.)","90,000"),("Advertisement Suspense A//c (Dr.)","1,20,000"):}
Pass the necessary single adjustment entry.


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Salim Ahmed Kawsar

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Calculation of Net Effect of Accumulated profits, Losses and Resreve:
`{:(,"Book Values (RS)"),("General Reserve","1,80,000"),("Contingency Reserve","30,000"),("Profit and Loss A//C (Cr.)","90,000"),(,overline("3,00,000")),("Advertisement Suspense A//c (Dr.)","1,20,000"),("Net Effect",underline underline overline("1,80,000")):}`
Calculation of Sacrifice/(Gain) of Each Partner: `{:(,P,Q,R,S),((i)"Their Old Share","3/10","3/10","1/10",....),((ii)"Their New Share",underline "3/10",underline "3/10",underline "3/10",underline "1/10"),((iii)"Difference" (i-ii),underline "3/10",underline "....",underline("2/10"),underline ("1/10")),(,, "Sacifice","Gain", "Gain"):}`

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