P,Q and R are partners in a firm sharing profits in the ratio of 2:2:1

1.	P,Q and R are partners in a firm sharing profits in the ratio of 2:2:1 on 1.4.2007 the partners decided to share future profits in the ratio of 3:2:1 on that day balance sheet of the firm shows General Reserve of Rs 50,000. Pass entry for distribution of reserve.
Answer» General Reserve A/c Dr. 50,000 To P’s Capital A/c 20,000 To Q’s Capital A/c 20000 To R’s Capital A/c 10000 (Being Reserve distributed in old ratio)

P,Q and R are partners in a firm sharing profits in the ratio of 2:2:1 on 1.4.2007 the partners decided to share future profits in the ratio of 3:2:1 on that day balance sheet of the firm shows General Reserve of Rs 50,000. Pass entry for distribution of reserve.

Answer»

General Reserve A/c Dr. 50,000

To P’s Capital A/c 20,000

To Q’s Capital A/c 20000

To R’s Capital A/c 10000

(Being Reserve distributed in old ratio)