P, Q and R are partners sharing profits ...

P, Q and R are partners sharing profits equally. They decided that in future R will get 1/7 share in profits. On the day of change, firm's Goodwill is valued at Rs. 42,000. Give Journal Entries arising on account of change in profit sharing ratio.

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Debit P and Q by Rs. 4,000 each and credit R by Rs. 8,000.

New Ratios `(3)/(7) : (3)/(7) : (1)/(7)`. P and Q gain `(2)/(21)` each and R sacrifices `(4)/(21)`

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