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Ashish, Aakash, and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March 2023 was as follows:

Liabilities Assets
Sundry Creditors

General Reserve

   

1,35,000

90,000

 

Cash in Hand

Cash at Bank

Sundry Debtors

Stock

84,000

1,40,000

80,000

1,40,000

Capital A/cs:

Ashish

Aakash

Amit

 

3,00,000

3,00,000

2,75,000

 

 

 

8,75,000

 

Land and Building

Machinery

Advertisement Suspense

 

4,00,000

2,50,000

6,000

    11,00,000 11,00,000

The partners decided to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2023. They also decided that:

i) Value of stock to be reduced to ₹ 1,25,000.

ii) Value of Machinery to be decreased by 10%

iii) Land and Building to be appreciated by ₹ 62,000.

iii) Provision for Doubtful Debts to be made @ 5% on Sundry Debtors.

iv) Aakash was to carry out reconstitution of the firm at a remuneration of ₹ 10,000.

Pass necessary Journal entries to give effect to the above.

Anurag Pathak Changed status to publish April 30, 2023