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M.14 An Aid to Accountancy—CBSE XII

12. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 Z’s Capital A/c ...Dr. 18,000
To X’s Capital A/c 18,000
(Being the adjustment entry)

Working Notes:
1. Net Effect of the balances: `
General Reserve 90,000
Workmen Compensation Reserve 10,000
Advertisement Suspense A/c (40,000)
Net Amount to be adjusted 60,000
2. Calculation of Sacrifice/(Gain) due to change in Profit-sharing ratio:

5 2 3
X’s Sacrifice/(Gain) = - = (Sacrifice)
10 10 10
3 3
Y’s Sacrifice/(Gain) = - = 0 (No Change)
10 10
2 5 Ê 3 ˆ
Z’s Sacrifice/(Gain) = - = Á ˜ (Gain)
10 10 Ë 10 ¯
In this case Z has gained 3/10 in share whereas, X has sacrificed 3/10th share. Thus,
3
Z will compensate X for his gained share, i.e., ` 60,000 × = ` 18,000.
10
13.
Dr. A’S CAPITAL ACCOUNT Cr.
Particulars ` Particulars `

To A’s Loan A/c 10,000 By Balance b/d 60,000
To A’s Executors’ A/c (Balancing Figure) 90,350 By General Reserve A/c (3/10 of ` 10,000) 3,000
By Int. on Capital A/c (` 60,000 × 3/12 × 6/100) 900
By Profit and Loss Suspense A/c (WN 1) 11,250
By B’s Capital A/c (WN 2) 10,800
By C’s Capital A/c (WN 2) 14,400
1,00,350 1,00,350

Working Notes:
1. Share of Profit = ` 1,00,000 × ` 1,50,000/` 4,00,000 × 3/10 = ` 11,250.
2. Adjustment of Goodwill:
Average Profit of last 3 Years = ` 42,000
Firm’s Goodwill = ` 42,000 × 2 = ` 84,000
A’s Share of Goodwill = ` 84,000 × 3/10 = ` 25,200, which is to be contributed by B and C in their
gaining ratio of 3 : 4.