A B and C are partners sharing profits and losses in the ratio of 5 3 2 Their Balance Sheet as at 31......

A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as follows:

They decided to share profits equally w.e.f. 1st April, 2019. They also agreed that:

i

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.

vi

Goodwill is to be valued at 2 years' purchase of last 3 years profits. Profits being for 2018-19 − 50,000 Loss

; 2017-18 −  2,50,000 and 2016-17 −  2,50,000.

vii

C was to carry out the work for reconstituting the firm at a remuneration includingexpenses

of   5,000. Expenses came to   3,000.

Pass Journal entries and prepare Revaluation Account.

By: Aman