P,Q and Rare partners sharing profits and losses in the ratio5:3:2. From 1st January,2006, they decide to share profitsand losses in equalproportions. The partnership deed provides that in the eventof any change in profit sahring ratio, the goodwill should bevalued at three years’ purchase of the average of five years’profits. The profits and losses of the preceding five years are:PROFITS: 2001 – Rs 60,0002002 – Rs 1,50,0002003- Rs 1,70,0002004 – Rs 1,90,000LOSS:.2005 – Rs 70,000Give the necessary journal entry to record the above change.
Q.No.:32 P,Q and Rare partners sharing profits and losses in the ratio5:3:2. From 1st