ashish, Abhishek and Akhilesh have been sharing profit in the ratio 2 ratio 1 ratio 1 respectively in the firm has exited for some year. now they decide to share profit equally and that too to retrospective effect from 2005. the profit for the last three years were in2005 20000 in 2006 18000 in 2007 16000 show the adjustmentof profit for the last three years by mean of journal entries.
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Liabilities Rs. Assets Rs.
Sundry Creditors 75,000 Cash in Hand 24,000
General Reserve 90,000 Cash at Bank 1,40,000
Capital A/c's:
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 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, 2018 . They also decided that :
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