A, B and C were partners in a firm sharing profits in the ratio of 1 : 3 : 2. They decided that with effect from 1st April, 2016, they will share profits in the ratio of 4 : 6 : 5. For this purpose the goodwill of the firm is valued at the total of preceding three year's profits. The profits were :
`{:(," Rs."),(2011-12,"40,000"),(2012-13,"10,000 (Loss)"),(2013-14,"80,000 (Loss)"),(2014-15,"1,20,000"),(2015-16,"1,40,000"):}`
Reserves and profits appeared in the balance sheet at Rs. 40,000 and Rs. 30,000 respectively. Partners do not want to distribute the reserves and profits appearing in the balance sheet. Pass a single journal entry to record the change.

Explanation

Debit A and Credit B by Rs. 25,000