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4.16 Double Entry Book Keeping—CBSE XII

The partners agreed to share profits w.e.f. 1st April, 2018 in the ratio of 5 : 3 : 2. They also agreed to the
the following:
(i) Value of stock be increased to ` 2,25,000.

(ii) Provision for Doubtful Debts be written back, all debtors being good.
(iii) Value of Machinery be reduced by 5%.
(iv) Value of Computers be reduced to ` 82,500.
(v) Goodwill of the firm for the purpose was valued at ` 1,00,000.
Pass an adjustment entry giving effect to the above arrangement and prepare Balance Sheet of the firm
after adjustments when:
(i) The partners decide to carry the assets and liabilities at their revised values and General Reserve
and Profit and Loss Account at their existing values.
(ii) The partners decide to carry assets and liabilities including General Reserve and Profit and Loss
Account at their existing values by passing a single adjustment entry.
[Ans.: In Both the Cases: Balance Sheet Total—` 10,60,000.]