question_answer

Neetu, Sonia and Bobby are partners sharing profits in the ratio of 4 : 3 : 2. On 1st April, 2016, Neetu gave a notice to retire from the firm. Sonia and Bobby decided to share future profits in the ratio of 2 : 3. The adjusted capital accounts of Sonia and Bobby showed a balance of Rs. 1,50,000 and  Rs. 2,45,000 respectively. The total amount to be paid to Neetu is Rs. 2,00,000. This amount is to be paid by Sonia and Bobby in such a way that their capitals become proportionate to their new profit sharing ratio. Pass necessary journal entries for the above transactions in the books of the firm. Show your working clearly.

Answer:

Cash brought in by Sonia = Rs. 88,000 and Bobby = Rs. 1,12,000