X, Y and Z are partners in a firm sharin...

X, Y and Z are partners in a firm sharing profits in the ratio 4 : 3 : 2. Their Balance Sheet as at 31-3-2016 showed a debit balance of Profit & Loss A/c Rs. 1,80,000. From 1-4-2016 they will share profits equally. In the necessary journal entry to give effect to the above arrangement when X, Y and Z decided not to close the Profit & Loss Account :

Dr. X by Rs. 20,000, Cr. Z by Rs. 20,000

Cr. X by Rs. 20,000, Dr. Z by Rs. 20,000

Dr. X by Rs. 40,000, Cr. Z by Rs. 40,000

Cr. X by Rs. 40,000, Dr. Z by Rs. 40,000

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