B, P and T were partners in a firm sharing profits and losses in the ratio of 5:3:2. On 31.03.2022, their Balance Sheet was as follows:

Balance Sheet of B, P and T as at 31st March, 2022

Liabilities Amount
Assets Amount
Creditors 1,40,000 Bank 1,44,000
General Reserve 2,00,000 Stock 66,000
Workmen’s Compensation Fund
90,000
Debtors       1,50,000
Capitals: Less: Provision for
Doubtful debts       20,000

1,30,000
B       4,00,000 Furniture 70,000
P       2,00,000 Machinery 2,20,000
T       1,00,000 7,00,000 Land and Building 5,00,000
11,30,000 11,30,000

On the above date, B retired from the firm on the following terms:

  1. Goodwill of the firm will be valued at 3,60,000 and B’s share will be adjusted without opening goodwill account.
  2. Furniture will be reduced to 60,000.
  3. A claim of 1,00,000 was admitted for workmen’s compensation.
  4. B was paid 20,000 through a cheque and the balance was transferred to his loan account.

Prepare Revaluation Account and Partners’ Capital Accounts.

Marks-6, CBSE:2022-23/Compartment/Q-26*

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