Question

\( A, B \) and \( C \) are partners in a firm sharing profits in the ratio of \( 3: 3: 2 \). From \( 1^{\text {st }} \) April 2021 they decided to share profits equally. On that date following balances appeared in their books; Workman compensation reserve. ₹ \( 1,20,000 \) Investment fluctuation reserve \( \quad ₹ 20,000 \) Investments ( at cost) \( ₹ 4,00,000 \) It was agreed that; - Goodwill of the firm be valued at \( ₹ 1,80,000 \) - Investments be valued at \( ₹ 3,40,000 \). Pass necessary journa! entries.

Answer 1

1. Workmen compensation reserve A/c Dr. 120000

To A capital A/c 45000

To B capital A/c 45000

To C capital A/c 30000

2. IFR A/c dr. 20000

    Revaluation A/c dr. 40000

    To investment A/c 60000

A CAPITAL A/C DR. 15000

B CAPITAL A/C DR. 15000

C CAPITAL A/C DR. 10000

         TO REVALUATION A/C 40000   

3. C CAPITAL A/C DR. 15000

     TO A CAPITAL A/C 7500

      TO B CAPITAL A/C 7500