Page 106 - MA12

M.12 Management Accounting (Section B)—ISC XII

ADJUSTMENT JOURNAL ENTRY
Date Particulars L.F. Dr. (`) Cr. (`)
2020
April 1 Siya’s Capital A/c (` 1,65,000 × ` 2/10) ...Dr. 33,000
Miya’s Current A/c (` 1,65,000 × ` 1/10) ...Dr. 16,500
To Priya’s Capital A/c (` 1,65,000 × ` 3/10) 49,500
(Being the adjustment made for net accumulated
profits , losses and reserves)
(b) JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2020
April 1 Rose’s Capital A/c ...Dr. 36,000
Daisy’s Capital A/c ...Dr. 12,000
Lily’s Capital A/c ...Dr. 12,000
To Goodwill A/c 60,000
(Being the existing goodwill written off)
General Reserve A/c ...Dr. 22,500
To Rose’s Capital A/c 13,500
To Daisy’s Capital A/c 4,500
To Lily’s Capital A/c 4,500
(Being 25% balance of General Reserve retained for contingencies
and balance appropriated)
Revaluation A/c ...Dr. 2,000
To Provision for Outstanding Legal Charges A/c 2,000
(Being the provision created for outstanding legal charges)
Investments A/c ...Dr. 25,000
Unexpired Insurance A/c ...Dr. 2,000
To Revaluation A/c 27,000
(Being the increase in value of assets recorded)
Revaluation A/c ...Dr. 25,000
To Rose’s Capital A/c 15,000
To Daisy’s Capital A/c 5,000
To Lily’s Capital A/c 5,000
(Being the gain (profit) on revaluation transferred to
Partners’ Capital Accounts)
Rose’s Capital A/c ...Dr. 2,00,000
To Investments A/c 2,00,000
(Being the investments taken by Rose)
Investments Fluctuation Reserve A/c ...Dr. 45,000
To Rose’s Capital A/c 27,000
To Daisy’s Capital A/c 9,000
To Lily’s Capital A/c 9,000
(Being the investments of Fluctuation Reserve distributed among partners)
Daisy’s Capital A/c ...Dr. 30,000
Lily’s Capital A/c ...Dr. 30,000
To Rose’s Capital A/c 60,000
(Being the Rose’s share of goodwill adjusted between Daisy and
Lily in their gaining ratio, i.e., 1 : 1)
Rose’s Capital A/c ...Dr. 2,29,500
To Bank A/c 1,00,000
To Rose’s Loan A/c 1,29,500
(Being ` 1,00,000 paid to Rose and balance transferred to her Loan Account)