Gita, Radha and Garv were partners in a firm sharing profits and losses in the ratio of 3:5:2. On 31st March, 2019, their balance sheet was as follows :

Balance Sheet of Gita, Radha & Garv as on 31st March, 2019

Liabilities

 

Amount (Rs.)

Assets

 

Amount (Rs.)
Sundry Creditors60,000Cash50,000
General Reserve40,000Stock80,000
Capitals : Debtors40,000
Gita 3,00,000 Investments30,000
Radha 2,00,000 Buildings5,00,000
Garv 1,00,0006,00,000  
 7,00,000 7,00,000

Radha retired on the above date and it was agreed that :

(a) Goodwill of the firm be valued at Rs. 3,00,000 and Radha’s share be adjusted through the capital accounts of Gita and Garv.

(b) Stock was to be appreciated by 20%.

(c) Buildings were found undervalued by Rs. 1,00,000.

(d) Investments were sold for Rs. 34,000.

(e) Capital of the new firm was fixed at Rs. 5,00,000 which will be in the new profit sharing ratio of the partners ; the necessary adjustments for this purpose were to be made by opening current accounts of the partners.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm on Radha’s retirement.

Marks-8, CBSE:2019-20/Main/05/Q-22*

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