Lisa, Monika and Nisha were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March, 2019, their Balance Sheet was as follows:

Balance Sheet of Lisa, Monika and Nisha as at 31st March, 2019

Liabilities

Amount (Rs.)

Assets

Amount (Rs.)

Trade Creditors

1,60,000

Land and Buildings

10,00,000

Bills Payable

2,44,000

Machinery

12,00,000

Employees Provident Fund

76,000

Stock

10,00,000

Capitals

 

Sundry Debtors

4,00,000

Lisa             14,00,000

 

Bank

40,000

Monika      14,00,000

 

 

 

Nisha            3,60,000

31,60,000

 

 

 

36,40,000

 

36,40,000

 

 

On 31st March, 2019, Monika retired from the firm and the remaining partners decided to carry on the business. It was agreed that:

(i) Land and building be appreciated by Rs.  2,40,000 and machinery be depreciated by 10%.

(ii) 50% of the stock was taken over by the retiring partner at book value.

(iii) Provision for doubtful debts was to be made at 5% on debtors.

(iv) Goodwill of the firm be valued at Rs.  3,00,000 and Monika’s share of goodwill be adjusted in the accounts of Lisa and Nisha.

(v) The total capital of the new firm be fixed at Rs.  27,00,000 which will be in the proportion of the new profit sharing ratio of Lisa and Nisha. For this purpose, current accounts of the partners were to be opened.

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

Marks-8, CBSE:2018-19/Comp/Q-16*

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