question_answer

Pawan, Iqbal and Rick are partners sharing profits in the ratio of 2 : 2 : 1. From 1st April, 2017, they decided to share profits in the ratio of 1 : 2 : 2. On that date, following balances appeared in the balance sheet. Profit and loss (debit balance Rs. 40,000); general reserve Rs. 1,40,000 and deferred revenue expenditure Rs. 20,000. Pass adjusting journal entries when these reserves will appear in the books of the reconstituted firm.

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