Mita, Geeta and Mohit were partners in a firm sharing profits and losses in the ratio of 5:3:2. With effect from 1″ April, 2022, they mutually agreed to share profits and losses in the ratio of 2:2:1. It was agreed that:

(i) Goodwill of the firm was valued at ₹1,40,000

(ii) Profit on revaluation of assets and re-assessment of liabilities amounted to ₹1,20,000.

Pass necessary journal entries for the above transactions in the books of the firm, Show your working notes clearly.

Marks-3, CBSE:2022-23/Zone-2/Set-1/Q-20