Bhavya and Sakshi are partners in a firm sharing profits and losses in the ratio of 3 2 On 31st Marc...........

Bhavya and Sakshi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as under:

BALANCE SHEET OF BHAVYA AND SAKSHI

as at 31st March, 2018

The partners have decided to change their profit sharing ratio to 1 : 1 with immediate effect. For the purpose, they decided that:

i

Investments to be valued at 20,000.

ii

Goodwill of the firm be valued at 24,000.

General Reserve not to be distributed between the partners.

You are required to pass necessary Journal entries in the books of the firm. Show workings.