A, B and C are partners in a firm sharing profits and losses as 8 : 5 : 3. Their Balance Sheet as at 31st December, 2017, was as follows :From 1st January 2018 they agreed to alter their profit-sharing ratio as 5: 6: 5. It is also decided that:

(a) The fixed assets should be valued at  ₹3,31,000;

(b) A provision of 5% on sundry debtors to be made for doubtful debts;

(c) The goodwill of the firm at this date be valued at three years’ purchases of the average net profits of the last five years before, charging insurance premium; and

(d) The stock be reduced to 1,12,000. There is a joint life insurance policy for 2,00,000 for which an annual premium of  ₹10,000 is paid, the premium being charged to Profit and Loss Account. The surrender value of the policy on 31st December, 2017 was  ₹78,000.

The net profit of the firm for the last five years were : ~ 14,000; ~ 17,000; ~ 20,000; ~ 22,000 and ~ 27,000. Goodwilland the surrender value of the joint policy was not to appear in the books.
Draft Journal Entries necessary to adjust the Capital Accounts of the partners.

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Liabilities Sundry Creditors General Reserve Partners' Loan Accounts: Partners' Capital Accounts: ABABC 1,50,000 Cash 80,000 Bills Receivable 40,000 30,000 Stock 1,00,000 Fixed Assets 80,000 70,000 5,50,000 Sundry Debtors Assets 40,000 50,000 60,000 1,20,000 2,80,000 5,50,000