(i) When Old P&L A/c and General Reserve balances are not to appear in the new firm’s books.
Journal
Date |
Particulars |
Dr |
Cr. |
|
P&L A/c Dr. |
15,000 |
|
|
General Reserve A/c Dr. |
20,000 |
|
|
To Aman’s Capital A/c |
|
14,000 |
|
To Raman’s Capital A/c |
|
21,000 |
|
(for the amount of P&l A/c and General reserve distributed among the partners) |
|
|
(ii) When Old P&L A/c and General Reserve balances are to appear in the new firm’s books.
Journal
Date |
Particulars |
Dr. |
Cr. |
|
P&L A/c Dr. |
15,000 |
|
|
General Reserve A/c Dr. |
20,000 |
|
|
To Aman’s Capital A/c |
|
14,000 |
|
To Raman’s Capital A/c |
|
21,000 |
|
(for the amount of P&l A/c and General reserve distributed among the partners) |
|
|
|
Aman’s Capital A/c Dr. |
11,200 |
|
|
Raman’s Capital A/c Dr. |
16,800 |
|
|
Mohan’s Capital A/c Dr. |
7,000 |
|
|
To P&L A/c |
|
15,000 |
|
To General Reserve A/c |
|
20,000 |
|
(for the amount credited to partners written off) |
|
|
Adjustment of Partners' Capital
Adjustment of Partners’ Capital can be any of the following:
A. Calculation of New Partner's Capital on the basis of Old Partners’ Capital
B. Adjustment of Old Partners’ Capital on the basis of New Partner's Capital
These cases are further explained with the help of illustrations.