Question

Reeha, Meenu and Sara were partners in a partnership firm sharing profits and losses in the ratio of 2 : 2 : 1. With effect from 1^st April, 2023, they agreed to share profits and losses equally. On that date, there was a General Reserve of ₹ 50,000 in the books of the firm. It was agreed that:

1. Goodwill of the firm be valued at ₹ 3,00,000.
2. Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 30,000. 

Pass necessary journal entries for the above transactions in the books of the firm.

Answer 1

Journal Entries
In the books of Reeha, Meenu and Sara
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
1.	General Reserve A/c   ...Dr.		50,000	-
	Revaluation A/c   ...Dr.		30,000	-
	To Reeha Capital A/c		-	32,000
	To Meenu Capital A/c		-	32,000
	To Sara Capital A/c		-	16,000
	(Being General Reserve and Revaluation profit transferred to Partners Capital Ne in old ratio)
2.	Saara Capital A/c   ...Dr.		40,000	-
	To Meenu Capital A/c		-	20,000
	To Reeha Capital A/c		-	20,000
	(Being goodwill adjusted)

Working Note:

Calculation of gaining and sacrificing ratio

Reeha = `2/5 - 1/3 = ((6 - 5))/15 = 1/ 15` (sacrifice)

Meenu = `2/5 - 1/3 = ((6 - 5))/15 = 1/15` (sacrifice)

Sara = `1/5 - 1/3 = ((3 - 5))/15 = 2/15` (gain)