Question

On 1st May, 2025, A, B, C and D were sharing profits and losses in the ratio of 1 : 2 : 3 : 4. C retires on this date and A, B and D agreed to share future profits and losses equally. On this date following balances appeared in their books:

	₹
Profit & Loss (Cr. Bal.)	80,000
Reserve Fund	40,000
Provident Fund	35,000

Partners decide to record the effect of retirement by a single journal entry. You are required to give the journal entry.

Answer 1

Journal
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	A’s Capital A/c        ...Dr.		28,000
	B’s Capital A/c       ...Dr.		16,000
	To C’s Capital A/c			36,000
	To D’s Capital A/c			8,000