Reyansh, Aayushman and Sabhya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2022 was as under:
Balance Sheet of Reyansh, Aayushman and Sabhya as at 31st March, 2022
| Liabilities | Amount ₹ |
Assets | Amount ₹ |
|---|---|---|---|
| Creditors | 2,20,000 | Cash | 1,60,000 |
| General Reserve | 1,20,000 | Debtors 1,80,000 | |
| Capitals: | Less: Provision for Doubtful Debts 20,000 |
1,60,000 |
|
| Reyansh 6,00,000 | Stock | 2,00,000 | |
| Aayushman 5,00,000 | Machinery | 6,00,000 | |
| Sabhya 3,00,000 | 14,00,000 | Building | 4,00,000 |
| Patents | 1,20,000 | ||
| Profit and Loss A/c | 1,00,000 | ||
| 17,40,000 | 17,40,000 |
Reyansh retired on the above date and it was agreed that:
(i) Goodwill of the firm on Reyansh retirement was valued at ₹12,00,000.
(ii) Aayushman and Sabhya will share future profits in the ratio of 2 : 3.
(iii) An unrecorded creditor of ₹40,000 will be taken into account.
(iv) Debtors of ₹30,000 will be written off as bad debts.
(v) Amount payable to Reyansh was to be transferred to his loan amount.
Pass necessary journal entries for the above transactions in the books of the firm.
Marks-6, CBSE:2022-23/Zone-1/Set-1/Q-24*