1.

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 Amount (₹) Assets Amount (₹) 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's Capital 50,000 Trade Receivables 18,500 Sakshi's 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.​

Answer» 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 Amount

(₹)		 Assets Amount

(₹)
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's Capital 50,000 Trade Receivables 18,500
Sakshi's 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.


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