Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2018 was as follows:
The partners decided to share profits in the ratio of 2 ; 2 : 1 w.e.f. 1st April, 2018. They also decided that:
(i) Value of stock to be reduced to ₹ 1,25,000.
(ii) Value of machinery to be decreased by 10%.
(iii) Land and Building to be appreciated by ₹ 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 ₹ 10,000.
Pass necessary journal entries to give effect to the above.
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Revaluation account credited to Ashish Account =2,666
Revaluation account credited to Aakash Account=2,667
Revaluation account credited to Amit Account = 2,667
Explanation:
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