A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. A retries and the new ratio between B and C is agreed at 3 : 2. Give journal entries on A’s retirement in the following case:

A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. A retries and the new ratio between B and C is agreed at 3 : 2. Give journal entries on A’s retirement in the following case:

Investment Fluctuation Reserve appears in the books at ₹ 40,000, when Investments (market value ₹ 1,00,000) appear at ₹ 85,000.

[Ans. (i) Investment Flcuctuation Reseve of ₹ 40,000 will be credited to A, B and C in 2 : 2 : 1.

(ii) Debit Investments and Credit Revaluation A/c by ₹ 15,000.

(iii) Revaluation Profit of ₹ 15,000 will be credited to A, B and C in 2 : 2 : 1.