P, Q and R were partners in a firm sharing profits in the ratio of 3:2:1 respectively. On March 31st, 2022, the balance sheet of the firm stood as follows:
|Q 10,000||Profit and Loss Account||1,200|
Q retired on the above-mentioned date on the following terms:
- Buildings to be appreciated by ₹7,000
- A provision for doubtful debts to be made at 5 % on debtors.
- Goodwill of the firm is valued at ₹18,000 and adjustment to be made by raising and writing off the goodwill.
- ₹2,800 was to be paid to Q immediately and the balance in his capital account to be transferred to his loan account carrying interest as per the agreement.
- Remaining partner decided to maintain equal capital balances, by opening current account.
Prepare the revaluation account and partner’s capital accounts.