| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Sundry Creditors | 75,000 | Cash in Hand | 24,000 |
| General Reserve | 90,000 | Cash at Bank | 1,40,000 |
| Capital A/c : | Sundry Debtors | 80,000 | |
| Ashish – 3,00,000 | Stock | 1,40,000 | |
| Aakash – 3,00,000 | Land and Building | 4,00,000 | |
| Amit – 2,75,000 | 8,75,000 | Machinery | 2,50,000 |
| Advertisement Suspense | 6,000 | ||
| 10,40,000 | 10,40,000 |
The partners decided to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2019. They also decided that:
(i) Value of stock to be reduced to Rs. 1,25,000.
(ii) Value of machinery to be decreased by 10%.
(iii) Land and Building to be appreciated by Rs. 62,000.
(iv) Provision for Doubtful Debts to be made @ 5% on Sundry Debtors.
(v) Aakash was to carry out reconstitution of the firm at a remuneration of Rs. 10,000.
Pass necessary Journal entries to give effect to the above
Solution
