Question

P and Q were partners sharing profits and losses in 2:1.with effect from 1 April 2015 they agreed top share the profits equally. They prepared a revaluation  account and unrecorded asset worth Rs 50,000 was found not to have recorded in the books.P was of the view that it should be  credited to revaluation account whereas Q was of the view that it shoud be credited to the capital accounts of partners  in equal proportion. Q agreed to the view point of P? Explain what viewpoint must have been put forward by P to which Q agree?

Answer 1

P would have given the argument that unrecorded asset belonged to the old firm when the profit sharing ratio was 2:1.hence it shoud be credited to revaluation account so that the profit on account of this asset could be shared  in 2:1.