C and V were partners sharing Profit and Losses in 3:2 with affect from 1st April 2021,
they decided to share future profits equally. On that date, following journal entry was
passed by the firm:
C's Current a/c Dr 30,000
To V's Current a/c
30,000
Which of the following balances was existing in the books of the firm on the date of
reconstitution?
a) Contingency Reserve 3,00,000
b) Profit and Loss (Dr.) Balance 3,00,000
c) Profit and Loss (Cr.) Balance 23,00,000
d) Advertisement Suspense Account ₹2,00,000.