12th Class Accountancy Change in Profit Sharing Ratio Among Existing Partner Question Bank MCQs - Change in Profit-Sharing Ratio Among Existing Partners

P, Q and R sharing profits in the ratio of 2:2:1. They decided to change their profit sharing ratio to 1:1:1 from 1st April 2021. On that date:

Liabilities                            Amount Assets Amount

                     Debtors 2,60,000

Less: Provision

                 For Doubtful Debts 20,000 2,40,000

Additional information:

Bad Debts Rs.40,000 were to be written off. A provision of 5 % on Debtors to be made for bad and doubtful debts.

What will be the Revaluation Profit/Loss?

A) Profit Rs.40,000

B) Loss Rs. 31,000

C) Profit Rs. 31,000

D) Loss Rs.40,000

Correct Answer: B

Solution :

Loss Rs. 31,000