Question

14. A, B and C are partners in a firm sharing profits and losses in the ratio of 2: 3:1. They
decide to share future profits and losses in the ratio of 3:2:1 with effect from 1st April,
2014. Their Balance Sheet showed a debit balance of 24,000 in profit and Loss Account
and a balance of 344,000 in General Reserve. For this purpose, it was agreed that:
(a) The goodwill of the firm be valued at 21,80,000.
(b) Creditors amounting to £2,400 were not likely to be claimed.
(c) The Machinery (having book value of 3,00,000) be depreciated by 6%.
(d) Unrecorded Investments to be valued at 21,35,600.
(e) The Land (having book value of 23,00,000) be valued at 24,80,000.
Give the necessary single adjusting entry to record the above arrangement.​

Answer 1

Explanation:

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