A and B are partners sharing profits in the ratio of 4 :3 . Their Balance Sheet as at 31st March, 2018 stood as:
|
|
|
Liabilities
|
₹
|
Assets
|
₹
|
Sundry Creditors |
28,000 |
Cash |
20,000 |
Reserve |
42,000 |
Sundry Debtors |
1,20,000 |
Capital A/cs: |
|
Stock |
1,40,000 |
A |
2,40,000 |
|
Fixed Assets |
4,20,000 |
B
|
1,20,000
|
3,60,000
|
|
|
|
4,30,000
|
|
4,30,000
|
|
|
|
|
They decided that with effect from 1st April, 2018, they will share profits and losses in the ratio of 2 : 1 . For this purpose they decided that:
(i) Fixed Assets are to be depreciated by 10%.
(ii) A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
(iii) Stock be valued at ₹ 1,90,000.
(iv) An amount of ₹ 3,700 included in Creditors is not likely to be claimed .
Partners decided to record the revised values in the books . However, they do not want to disturb the Reserve . You are required to pass journal entries , prepare Capital Accounts of Partners and the revised Balance Sheet.