Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad. Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage she suggested that it be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then gave a proposal that if his share in the profit is increased, he will not mind free distribution of left over food. Bhavya happily agreed. So, they decided to change their profit sharing ratio to 1 : 2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs.  18,000. On that date the goodwill of the firm was valued at Rs.  1,20,000.

(a) Pass necessary journal entries for the above in the books of the firm.

(b) State any two values highlighted in the above para.

Marks-4, CBSE:2016-17/Comp-AI/Q-11

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