Question

22. A, B and C are partners sharing profits and losses in the ratio of 5:3 2. Their Balance She
31st March, 2020 stood as follows:
Assets
Liabilities
Capital A/cs:
А
B
C
General Reserve
Investments Fluctuation Reserve
Sundry Creditors
2,50,000
2,50,000
2,00,000
7,00,000
60,000
30,000
90,000
Land and Building
Machinery
Computers
Investments (Market Value ? 90,000)
Sundry Debtors
Cash in Hand
Cash at Bank
Advertisement Suspense
8,80,000
They decided to share profits equally w.ef. 1st April, 2020. They also agreed that
(0) Value of Land and Building be decreased by 5%.
(ii) Value of Machinery be increased by 5%.
(iii) A Provision for Doubtful Debts be created @ 5% on Sundry Debtors.
(iv) A Motor Cycle valued at 20,000 was unrecorded and is now to be recorded in the books
(v) Out of Sundry Creditors, 10,000 is not payable. Hence, is to be written back.
(vi) Goodwill is to be valued at 2 years' purchase of last 3 years profits. Profits being for year
31st March, 2020—50,000 (Loss): 2019-2,50,000 and 2018- 2,50,000
(vii) C was to carry out the work for reconstituting the firm at a remuneration (including expenses
*5,000. Expenses came to 3,000.
Pass Journal entries and prepare Revaluation Account.​

Answer 1

Explanation:

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Answer 2

Answer:

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