Nitin, Tarun and Amar are partners sharing profits equally and decide to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2019. The extract of their Balance Sheet as at 31st March, 2019 is as follows:
| Liabilities |
₹ |
Assets |
₹ |
| Investments Fluctuation |
60,000 |
Investments (At Cost) |
4,00,000 |
Answer the following questions:
i. On that date, following journal entry was passed by the firm:
| Date |
Particulars |
Debit
(₹) |
Credit
(₹) |
| April 2019 |
Investment Fluctuation Reserve A/c Dr. |
60,000 |
|
|
To Nitin’s Capital A/c |
|
20,000 |
|
To Tarun’s Capital A/c |
|
20,000 |
|
To Amar’s Capital A/c |
|
20,000 |
Which of the following adjustment was existing in the books of the firm on the date of reconstitution?
(a) When its Market Value is not given
(b) When its Market Value is ₹ 3,10,000
(c) When its Market Value is ₹ 4,24,000
(d) When its Market Value is ₹ 3,70,000
ii. On that date, following journal entry was passed by the firm:
| Date |
Particulars |
Debit
(₹) |
Credit
(₹) |
| April 2019 |
Investment Fluctuation Reserve A/c Dr. |
60,000 |
|
|
To Investment A/c |
|
30,000 |
|
To Nitin’s Capital A/c |
|
10,000 |
|
To Tarun’s Capital A/c |
|
10,000 |
|
To Amar’s Capital A/c |
|
10,000 |
Which of the following adjustment was existing in the books of the firm on the date of reconstitution?
(a) When its Market Value is ₹ 4,00,000
(b) When its Market Value is ₹ 4,24,000
(c) When its Market Value is ₹ 3,70,000
(d) When its Market Value is ₹ 3,10,000
iii. On that date, following journal entry was passed by the firm:
| Date |
Particulars |
Debit
(₹) |
Credit
(₹) |
| April 2019 |
Investment Fluctuation Reserve A/c Dr. |
60,000 |
|
|
Revaluation A/c Dr. |
30,000 |
|
|
To Investment A/c |
|
90,000 |
Which of the following adjustment was existing in the books of the firm on the date of reconstitution?
(a) When its Market Value is not given
(b) When its Market Value is ₹ 3,10,000
(c) When its Market Value is ₹ 4,24,000
(d) When its Market Value is ₹ 3,70,000
iv. On that date, following journal entry was passed by the firm:
| Date |
Particulars |
Debit
(₹) |
Credit
(₹) |
| April 2019 |
Investment A/c Dr. |
24,000 |
|
|
To Revaluation A/c |
|
24,000 |
Which of the following adjustment was existing in the books of the firm on the date of reconstitution?
(a) When its Market Value is not given
(b) When its Market Value is ₹ 3,10,000
(c) When its Market Value is ₹ 4,24,000
(d) When its Market Value is ₹ 3,70,000
