Kamal, Rahul and Neeraj were partners in a firm sharing profits and losses in the ratio of 5:3:2. On 31st March, 2022, their Balance Sheet was as under:

Balance Sheet of Kamal, Rahul and Neeraj as on 31t March, 2022

Liabilities Amount
Assets Amount
Capitals: Land and Buildings 1,70,000
Kamal 1,20,000 Plant and Machinery 2,60,000
Rahul 1,20,000 Stock 1,00,000
Neeraj 1,20,000 3,60,000 Debtors 80,000
General Reserve 1,20,000 Cash 50,000
Sundry Creditors 1,80,000
6,60,000 6,60,000

On the above date, Rahul retired and following terms were agreed upon:

  1. Goodwill of the firm was valued at 3,50,000.
  2. An item of 10,000 included in Sundry creditors is not likely to be claimed and hence written off. Stock was valued at 90,000.
  3. Capital of the new firm was fixed at 2,10,000 and the same will be adjusted in the profit sharing ratio of the remaining partners. For this purpose, the required cash will be brought in or paid off as the case may be.
  4. Amount payable to Rahul will be transferred to his loan account.

 

Prepare Revaluation Account and Partners’ Capital Accounts on Rahul’s retirement.

Marks-6, CBSE:2022-23/Zone-5/Set-1/Q-24

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