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*

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