Arnav, Bhavi and Chavi were in partnership sharing profits and losses in the ratio of 3:21. On 31 March, 2023, their Balance Sheet was as follows:
Balance Sheet of Arnav, Bhavi and Chavi as at 31st March, 2023
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) | ||
|---|---|---|---|---|---|
| Capitals: Arnav Bhavi Chavi Creditors |
1,80,000 1,60,000 1,00,000 |
4,40,000 2,50,000 |
Plant & Machinery Furniture Debtors Less: Provision for doubtful debts Cash in Hand Profit & Loss Account |
3,50,000 20,000 |
3,00,000 20,000 3,30,000 10,000 30,000 |
| Total | 6,90,000 | Total | 6,90,000 | ||
Chavi retired on the above date. It was agreed that:
(i) Plant and Machinery be valued at Rs. 4,30,000.
(ii) The existing Provision for Bad Debts was to be increased by 50%.
(iii) Chavi’s share of Goodwill was valued at Rs. 80,000 and the same was to be treated without opening goodwill account.
(iv) The total amount to be paid to Chavi was brought in by Arnav and Bhavi in such a way as to make their capitals in proportion to their new profit-sharing ratio.
Prepare Revaluation Account and Partners’ Capital Accounts.
Marks-6, CBSE: 2023-24/Zone-5/Set-1/Q-24
Answer :
