Following is the balance sheet of Sharmila, Urmila and Pramila, who shared profits and losses in the ratio of 5:3:2 respectively.

3. Journal of Partnership Firm

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs. )
31.3.13	Reserve Fund A/c ..... Dr.		50000
	To Sharmila’s Capital A/c			25000
	To Urmila’s Capital A/c			15000
	To Pramila’s Capital A/c			10000
	[Being reserve fund distributed and transfrred to all partners’ capital account in their old ratio)
31.3.13	Goodwill A/c ...... Dr.		12000
	To Pramila’s Capital A/c			12000
	[Being Goodwill raised and credited to Pramila’s Capital A/c ]
31.3.13	Sharmila’s Capital A/c .... Dr.		7500
	Urmila’s Capital A/c ..... Dr.		4500
	To Goodwill A/c			12000
	[Being Goodwill written off and debited to remaining partners’ capital A/c in their gain ratio]
31.3.13	Land and Building A/c .... Dr.		20000
	Stock A/c .... Dr.		2000
	To Profit and Loss Adjustment A/c			22000
	[Being appreciation in the value of Assets recorded]
31.3.13	Profit and Loss Adjustment A/c .... Dr.		2000
	To Furniture A/c			2000
	[Being the furniture depreciated in value]
31.3.13	Profit and Loss Adjustment A/c .... Dr.		20000
	To Sharmila’s Capital A/c			10000
	To Urmila’s Capital A/c			6000
	To Pramila’s Capital A/c			4000
	[Being profit on revaluation of assets and liabilities transfered to partners’ capital A/c ]
31.3.13	Pramila’s Capital A/c .......Dr.		126000
	To Pramila’s Loan A/c			126000
	[Being balance due to Pramila transferred to her Loan A/c ]

Working Note: Profit and Loss Adjustment Account & Partners Capital Accounts

Profit and Loss Adjustment Account

Particulars	Amount	Amount	Particulars	Amount	Amount
To Furniture A/c		2000	By Land and Buildings A/c		20000
To Partners’ Capital A/c			By Stock A/c		2000
Sharmila	10000
Urmila	6000
Pramila	4000	20000
		22000			22000

Partners Capital Accounts

Particulars	SHARMILA	URMILA	PRAMILA	Particualrs	SHARMILA	URMILA	PRAMILA
To Goodwill A/c	7500	4500		By Balance b/d	200000	150000	100000
To Pramila’s Loan A/c			126000	By Reserve Fund	25000	15000	10000
				By Goodwill A/c	-	-	12000
				By Profit & Loass Adjustment A/c	10000	6000	4000
To Balance c/d	227500	166500	-
	235000	171000	126000		235000	171000	126000