CBSE 2025, Set 1

Question

(a) The firm of Amish, Nitish and Misha, who have been sharing profits in the ratio of 2:2:1, have existed for some years. Misha wanted that she should get equal share in the profits with Amish and Nitish and she further wished that the change in the profit sharing ratio should come into effect retrospectively for the last three years. Amish and Nitish had agreement for this.
The profits for the last three years were:
2021-22 : ₹ 1,15,000
2022-23 : ₹ 1,24,000
2023-24 : ₹ 2,11,000

Show adjustment of profits by means of a single adjustment journal entry. Show your working clearly.

Edvaya · Accepted Answer

The correct answer is Subjective. **Working Notes (Adjustment Table):** Total Profit for last 3 years = 1,15,000 + 1,24,000 + 2,11,000 = ₹ 4,50,000. | Partners | Dr. Profits (₹) (2:2:1) | Cr. Profits (₹) (1:1:1) | Net Effect Dr. (₹) | Net Effect Cr. (₹) | |---|---|---|---|---| | Amish | 1,80,000 | 1,50,000 | 30,000 | | | Nitish | 1,80,000 | 1,50,000 | 30,000 | | | Misha | 90,000 | 1,50,000 | | 60,000 | | **Total** | **4,50,000** | **4,50,000** | **60,000** | **60,000** | **Journal Entry (Books of Amish, Nitish and Misha):** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Amish's Capital A/c ...Dr. Nitish's Capital A/c ...Dr.     To Misha's Capital A/c (Adjustment of profit for the last three years on account of change in profit sharing ratio) | | 30,000 30,000 | 60,000 |

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Accountancy > Accounting For Partnership Firms > Change In Profit Sharing Ratio

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