Sunny and Ujjwal were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1 st April, 2024 Timmy was admitted as a new partner for 1/5 th share in profits which he acquired equally from Sunny and Ujjwal.

On the date of Timmy’s admission the Balance Sheet of Sunny and Ujjwal showed investments at ₹5,00,000 and a balance of ₹2,00,000 in Investment Fluctuation Reserve.

Pass necessary journal entries for treatment of Investment fluctuation reserve on the date of Timmy’s admission in each of the following cases:

(i) Market value of Investments was ₹5,00,000.
(ii) Market value of Investments was ₹3,00,000.
(iii) Market value of Investments was ₹2,00,000.

Marks-3, CBSE: 2024-25/Zone-2/Set-1/Q-18