A, B and C were partners in a firm. Their Balance Sheet as at 31st March, 2019 was as follows:
Balance Sheet of A, B and C as at 31st March, 2019
Liabilities   Amount (Rs.) Assets   Amount (Rs.)
Bill payable 20,000 Bank 20,000
Creditors 40,000 Furniture 28,000
General Reserve 30,000 Stock 20,000
Workmen Compensation Reserve 6,000 Debtors :                   45,000  
Capitals :   Less : Provision for doubtful debts        5,000 40,000  
A                              60,000   Land & Building 1,20,000
B                             40,000      
C                             32,000 1,32,000    
  2,28,000   2,28,000
  B retired on 1st April, 2019. A and C decided to share profits in the ratio of 2 : 1. The following terms were agreed upon :
  • Goodwill of the firm was valued at 30,000.
  • Bad-debts 4,000 were written off. The provision for doubtful debts was to be maintained @ 10% on debtors.
  • Land and Building was to be increased to 1,32,000.
  • Furniture was sold for 20,000 and the payment was received by cheque.
  • Liability towards Workmen Compensation was estimated at 1,500.
  • B was to be paid 20,000 through a cheque and the balance was transferred to his loan account.
Prepare Revaluation Account, Partners’ Capital Accounts and Bank Account.

Marks-8, CBSE:2019-20/Main/04/Q-22*

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