X and Y are partners in a firm sharing profits in the ratio of 4:1. Z is admitted in the firm for 1/5 share. On the admission of Z there was a balance of Rs. 20,000 in general reserve. What would be the journal entry for distributing the reserve.

Question

Option 1: General Reserve a/c Dr Rs. 20,000 To X's Capital A/c Rs.16,000 To Y's Capital A/c Rs. 4,000 (Being Reserve distributed)

Option 2: General Reserve a/c Dr Rs. 20,000 To X's Capital A/c Rs. 20,000

Option 3: General Reserve a/c Dr Rs. 20,000 To Y's Capital A/c Rs. 20,000

Option 4: General Reserve a/c Dr Rs. 20,000 To X's Capital A/c Rs. 10,000 To Y's Capital A/c Rs. 10,000

AfterBoards · Accepted Answer

The answer is 'General Reserve a/c Dr Rs. 20,000 To X's Capital A/c Rs.16,000 To Y's Capital A/c Rs. 4,000 (Being Reserve distributed)'. View full solution:

CUET Accountancy 2022 15 July Shift 2 PYQs

Keyboard Shortcuts