Ch-3 Change in PSR among partners

Out of the following, in which situation(s) the reconstitution of a firm takes place

• (A) At the time of change in profit sharing ratio amongst the partners

• (B) At the time of admission of a new partner

• (C) Both (a) and (b)

• (D) At the time of doing past adjustments

. P. Q and R were partners in a firm sharing profis in 5 :3 :2 ratio They decided to share the future profits in 2 :3: 5. For this purpose the goodwill of the firm was valued at 1,20,000. In adjustment entry for the treatment of goodwill due to change in the profit sharing ratio.

• (A) Cr. P by 24,000, Dr. R by ₹24,000

• (B) Cr. P by 60,000. Dr. R by ₹60,000

• (C) Cr. P by ₹36,000, Dr. R by ₹36,000

• (D) Dr P by 36,000, Cr R by ₹36,000

Red, Blue and White were partners in a firm sharing profits in the ratio of 1:2:2. They decided to share future profits in the ratio of 7:5:3 with effect from 1st April, 2019. Their Balance Sheet as on that date showed a balance of 22,500 in Deferred Revenue Expenditure Account. The amount to be debited respectively to the capital accounts of Red, Blue and White for writing off Deferred Revenue Expenditure will be

• A) ₹7,500, ₹7,500 and ₹7,500

• (B) ₹4,500, ₹9,000 and ₹9,000

• (C) ₹10,500, ₹7,500 and ₹4,500

• (D) 11.250, Nil and ₹11,250

Arun and Varun are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet showed a balance of ₹56,000 in the General Reserve Account and a debit balance of 14,000 in Profit and Loss Account. They now decided to share the future profits equally Instead of closing the General Reserve Account and Profit and Loss Account, it is decided to pass an adjustment entry

f or the same In adjustment entry :-

• (A) Dr Arun by ₹3,000, Cr Varun by ₹3,000

• (B) Dr. Arun by ₹5,000; Cr. Varun by ₹5,000

• (C) Cr. Arun by ₹5,000, Dr. Varun by ₹5,000

• (D) Cr. Arun by ₹3,000. Dr. Varun by ₹3,000

At the time of reconstitution of a partnership firm, recording of an unrecorded liability will lead to

• (A) Gain to the existing partners

• (B) Loss to the existing partners

• (C) Neither gain nor loss to the existing partners

• None of the above

Anubhav, Shagun and Pulkit are partners in a firm sharing profits and losses in the ratio of 2:21 On 1st April 2021, they decided to change their profit-sharing ratio to 5:32. On that date, debit balance of Profit & Loss A/c 30,000 appeared in the balance sheet and instead of closing the Profit & Loss A/c partners decided to pass an adjusting entry for it.

3.9

Which of the undermentioned options reflect correct treatment for the above treatment?

• (A) Shagun's capital account will be debited by ₹3,000 and Anubhav's capital account credited by ₹3,000

• (B) Pulkit's capital account will be credited by ₹3,000 and Shagun's capital account will be credited by ₹3,000

• (C) Shagun's capital account will be debited by ₹30,000 and Anubhav's capital account credited by ₹30,000

• (D) Shagun's capital account will be debited by ₹3,000 and Anubhav's and Pulkit's capital account credited by ₹2,000 and 1,000 respectively

Assertion (A):

Ashok, Chitra and Esha sharing profits in the ratio of 3: 2 :1, decide to share future profits equally Goodwill is appearing in the books of the firm at 1,20,000. It will be written off in 3: 2: 1

Reason (R):

Goodwill appearing in the books of the firm is purchased goodwill. On reconstitution of the firm it will be written off among the partners in the old profit sharing ratio In the context of the above two statements, which of the following is correct?

• A) Both (A) and (R) are correct and (R) is the correct reason of (A)

• (B) Both (A) and (R) are correct but (R) is not the correct reason of (A).

• (C) Only (R) is correct.

• (D) Both (A) and (R) are wrong.

. Assertion (A):

A and B are partners sharing profits in the ratio of 2 :1 They agreed that in future they will get interest on Capital @ 6% pa and will charge interest on drawings also at the same rate. They also decided that goodwill will be valued and sacrificing partners will be compensated by gaining partners

Reason (R):

Profit sharing ratio of A and B has not changed and hence there is no sacrificing or gaining partner. As such, goodwill need not be valued In the context of the above two statements, which of the following is correct?

• (A) is correct, but (R) is wrong

• (B) Both (A) and (R) are correct

• (A) is wrong, but (R) is correct

• (D) Both (A) and (R) are wrong.

A and B were partners in a firm sharing profits and losses equally.with effect from 1st April 2019 they decided to share profits in the ratio 4 :3. Due to change in profit sharing ratio B's gain or sacrifice will be:

• Gain 1/14

• Sacrifice 1/14

• Gain 4/7

• Sacrifice 3/7

A and B were partners in the firm sharing profits or losses in the ratio of 3: 5. with effect from 1st April 2019 they decided to share profits or losses equally. Due to change in profit sharing ratio, A's gain or sacrifice will be:

• Gain 3/8

• Gain 1/8

• Sacrifice 3/8

• Sacrifice 1/8