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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
13,800
Furniture
16,000
General Reserve
23,400
Land and Building
56,000
Investment Fluctuation Fund
20,000
Investments
30,000
Bhavya Capital
50,000
Trade Receivables
18,500
Sakshi Capital
40,000
Cash in Hand
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.
| BALANCE SHEET OF BHAVYA AND SAKSHI as at 31st March, 2018 |
|||
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors | 13,800 | Furniture | 16,000 |
| General Reserve | 23,400 | Land and Building | 56,000 |
| Investment Fluctuation Fund | 20,000 | Investments | 30,000 |
| Bhavya Capital | 50,000 | Trade Receivables | 18,500 |
| Sakshi Capital | 40,000 | Cash in Hand | 26,700 |
| 1,47,200 | 1,47,200 | ||
