accumulated profit and losses

Partner’s Capital Account

Class XII Accountancy

Unit: Partnership

Chapter: Admission of Partner

Topic: Treatment of Accumulated profits and Accumulated losses

Particulars Amount Particulars A Amount

P & L Account (Dr. Balance) Deferred Revenue Expenditure

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P & L Account (Cr. Balance) General Reserve

Contingency Reserve

Workmen compensation Fund

Investment Fluctuation Fund

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Liabilities Amount Assets Amount

P & L Account (Cr. Balance) General Reserve

Contingency Reserve

Workmen compensation Fund

Investment Fluctuation Fund

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P & L Account (Dr. Balance) Deferred Revenue Expenditure

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Treatment Journal entry

Accumulated profits

Credited in the old partner’s capital

Reserves A/c Dr Profit & Loss A/c(Profit) Dr.

To Old Partner’s Capital A/c [individually]

Accumulated losses

Debited in the old partner’s capital Old Partner’s Capital A/c Dr. [individually]

To Profit and Loss A/c [Loss]

Balance Sheet

Old

Partners In Old

Ratio

Partner

Mohan and Sohan

Ratio 2:1

Meena is admitted as

new Partner

For 1/4 th share

Old Balance Sheet

General Reserve ̀ 30,000

P & L Account (Dr. Balance) ̀ 6,000

Reserves A/c Dr 30,000

To Mohan’s Capital A/c 20,000

To Sohan’s Capital A/c 10,000

Mohan’s Capital A/c 4,000

Sohan’s Capital A/c 2 ,000

To Profit and Loss A/c 6,000