A and B shared profits in the ratio 2:3. With effect from 1st April,2021, they agreed to share profits equally. Goodwill of the firm was valued at Rs.60,000.The adjustment entry will be:
A. Dr. B’s Capital A/C and Cr. A’s Capital A’/C by Rs.6,000
B. Dr. A’s Capital A/C and Cr. B’s Capital A’/C by Rs.600
C. Dr. A’s Capital A/C and Cr. B’s Capital A’/C by Rs.6,000
D. Dr. B’s Capital A/C and Cr. A’s Capital A’/C by Rs.600
Answer:C
A and B shared profits in the ratio 2:3. With effect from 1st April,2021, they agreed to share profits equally. Goodwill of the firm was valued at Rs.60,000.The adjustment entry will be:
A. Dr. B’s Capital A/C and Cr. A’s Capital A’/C by Rs.6,000 B. Dr. A’s Capital A/C and Cr. B’s Capital A’/C by Rs.600 C. Dr. A’s Capital A/C and Cr. B’s Capital A’/C by Rs.6,000 D. Dr. B’s Capital A/C and Cr. A’s Capital A’/C by Rs.600