Mita, Gopal and Farhan were partners sharing profits and losses in the ratio 3 : 2 : 1. On 31st March 2018 they decided to change the profit sharing ratio to 5 : 3 : 2. On this date, the Balance Sheet showed Deferred Advertisement Expenditure ₹ 30,000 and Contingency Reserve ₹ 9,000. Goodwill was valued at ₹ 4,80,000. Pass the necessary Journal entries for the above transactions in the books of the firm on its reconstitution.
Mita, Gopal and Farhan were partners sharing profits and losses in the ratio 3 : 2 : 1.
On 31st March 2018 they decided to change the profit sharing ratio to 5 : 3 : 2.
On this date, the Balance Sheet showed Deferred Advertisement Expenditure ₹ 30,000 and Contingency Reserve ₹ 9,000.
Goodwill was valued at ₹ 4,80,000.
Pass the necessary Journal entries for the above transactions in the books of the firm on its reconstitution.
Anurag Pathak Changed status to publish April 30, 2023
