Bhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. On 31st March 2018, their Balance Sheet was as under:
Bhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3 : 2.
On 31st March 2018, their Balance Sheet was as under:
Balance Sheet of Bhavya and Sakshi as at 31st March, 2018
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors
General Reserve Investment Fluctuation Reserve Bhavya’s Capital Shakshi’s Capital |
13,800 23,400 20,000 50,000 40,000 |
Furniture
Land and Building Investments Trade Receivables Cash in Hand |
16,000 56,000 30,000 18,500 26,700 |
| 1,47,200 | 1,47,200 |
The Partners have decided to change their profit sharing ratio to 1 : 1 with immediate effect.
For the purpose, they decided that:
i) Investments to be valued at ₹ 20,000
ii) Goodwill of the firm be valued at ₹ 24,000
iii) General Reserve not to be distributed between the partners.
You are required to pass necessary Journal entries in the books of the firm. Show workings.
Anurag Pathak Changed status to publish April 30, 2023
