CBSE 2025, Set 1

Question

(b) Nidhi, Pranav and Ishu were partners in a firm sharing profits and losses in the ratio of 5:4:1. With effect from 1st April, 2024, they decided to share profits and losses in the ratio of 4:1:5. On that date, there was a debit balance of ₹ 4,00,000 in the Profit and Loss Account. The necessary journal entry to show the effect of the above will be: A). Ishu's Cap A/c Dr 1,60,000; To Nidhi's Cap A/c 40,000; To Pranav's Cap A/c 1,20,000 B). P&L A/c Dr 4,00,000; To Nidhi's Cap 2,00,000; To Pranav's Cap 1,60,000; To Ishu's Cap 40,000 C). Nidhi's Cap Dr 2,00,000; Pranav's Cap Dr 1,60,000; Ishu's Cap Dr 40,000; To P&L A/c 4,00,000 D). Nidhi's Cap Dr 40,000; Pranav's Cap Dr 1,20,000; To Ishu's Cap A/c 1,60,000

Edvaya · Accepted Answer

The correct answer is Nidhi's Cap Dr 2,00,000; Pranav's Cap Dr 1,60,000; Ishu's Cap Dr 40,000; To P&L A/c 4,00,000. (C) Nidhi's Capital A/c Dr. 2,00,000; Pranav's Capital A/c Dr. 1,60,000; Ishu's Capital A/c Dr. 40,000; To Profit & Loss A/c 4,00,000 **Explanation:** Debit balance of Profit and Loss Account signifies an accumulated loss. It is distributed among all partners in their old profit sharing ratio (5:4:1). | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Nidhi's Capital A/c ...Dr. Pranav's Capital A/c ...Dr. Ishu's Capital A/c ...Dr.     To Profit & Loss A/c | | 2,00,000 1,60,000 40,000 | 4,00,000 |

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

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