as old ratio isn't given is it equal ? and goodwill should be shared in difference in ratio right ?

Bhavya and Naman were partners  in a film carrying on a tiffin service in Hyderabad. Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage she suggested that it be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then gave a proposal that if his share in the profit is increased, he will not mind free distribution of left over food. Bhavya happily agreed. So, they decided to change their profit sharing ratio to 1 : 2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the film was valued at Rs. 1,20,000.

(a) Pass necessary journal entries for the above in the books of the firm.
(b) State any two values highlighted in the above Parap

Old share will be taken  as equal and goodwill will be share in their sacrificing ratio.

  • 5
What are you looking for?