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
|Ravi 3,00,000||Less: Provision for
doubtful debts 10,000
|Pandey 8,43,000||15,43,000||Land and Building||10,00,000|
|Profit and Loss Account
(Loss of 2021 22)
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.