Ravi, Mohan and Pandey were partners in a firm sharing profits and losses in the ratio of 7 : 8 : 9. On 31st March, 2022, their Balance Sheet was as follows:

Balance Sheet of Ravi, Mohan and Pandey as at 31st March, 2022

Liabilities Amount
Assets Amount
Creditors 1,41,000 Bank 27,000
General Reserve 24,000 Stock 91,000
Capitals: Debtors 2,10,000
Ravi 3,00,000 Less: Provision for
doubtful debts 10,000

Mohan 4,00,000 Machinery 3,00,000
Pandey 8,43,000 15,43,000 Land and Building 10,00,000
Profit and Loss Account
(Loss of 2021 22)
17,08,000 17,08,000

On 31st March, 2022, Mohan retired from the firm on the following terms:

(i) Goodwill of the firm was valued at 4,80,000.

(ii) Mohan’s share of goodwill will be credited to his capital account without opening goodwill account.

(iii) Debtors of 10,000 will be written off and a provision of 10% for bad and doubtful debts will be created on debtors.

(iv) Machinery will be depreciated by 10% and land and building will be appreciated by 5%.

(v) The balance in Mohan’s Capital Account will be transferred to his loan account.

Prepare Revaluation Account and Mohan’s Capital Account on Mohan’s retirement, in the books of the firm.

Marks-5, CBSE:2021-22/Compartment/Q-7*

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