Anita, Geeta and Sita were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2022 was as follow:
Balance Sheet of Anita, Geeta and Sita as at 31st March, 2022
|Capitals:||Land and Buildings||4,80,000|
|Geeta 2,00,000||Debtors 1,50,000|
|Sita 1,00,000||5,00,000||Less: Provision for
Doubtful debts 10,000
|Creditors||5,00,000||Cash at Bank||1,70,000|
On the above date, Anita retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and reassess the liabilities as follows:
(i) Goodwill of the firm was valued at ₹3,00,000.
(ii) Land and Building was to be appreciated by ₹1,23,000.
(iii) Bad debts amounted to ₹20,000. A provision for doubtful debts was to be maintained at 10% on debtors.
(iv) Anita was paid ₹80,000 immediately by cheque. The balance amount was transferred to her loan acount which was to be paid in two equal annual instalments along with interest @ 10% p.a.
Prepare Revaluation Account and Partner’s Capital Accounts on Anita’s retirement.