The following is the Balance Sheet of A, B and C who share profits in the ratio of 3 : 2 : 1 as on 1.1.2018From the above date, the partners decided to share profits equally. The following are agreed upon:

(i) The value of the land will be ₹21,000.

(ii) Joint life policy will not be shown.

(iii) Half of the reserve will be withdrawn by the partners;

(iv) The total capital of the partners will be 90,000. Any deficiency is to be brought in cash and the surplus is to be transferred to a Loan carrying interest @12% p.a.

Prepare necessary Ledger Accounts and re-draft the Balance Sheet.

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Capitals A B C Liabilities Reserve Joint Life Policy Reserve Creditors ₹ 30,000 Land 25,000 Building 20,000 Plant and Machinery 15,000 Joint Life Policy 12,000 Stock 3,000 Debtors Cash 1,05,000 Assets ₹ 15,000 30,000 20,000 12,000 15,000 10,000 3,000 1,05,000