Trisha, Urvi and Varsha were partners in a firm sharing profits and losses in the ratio of 5 : 4 : 1. Their Balance Sheet as at 31st March, 2023 was as follows:

Balance Sheet of Trisha, Urvi and Varsha as at 31st March, 2023

Liabilities Amount (₹) Assets Amount (₹)
Capitals :
Trisha 2,00,000
Urvi 1,30,000
Varsha 1,00,000
General Reserve Creditors
Fixed Assets 4,00,000
Stock 1,00,000
Debtors 1,50,000
4,30,000 Cash 2,00,000
1,50,000
2,70,000
8,50,000 8,50,000

Trisha retired on 1st April, 2023 and the partners agreed to the following terms:

(i) Fixed Assets were found overvalued by ₹ 80,000.

(ii) Stock was taken over by Trisha at ₹ 80,000.

(iii) Goodwill of the firm was valued at ₹ 1,00,000 on Trisha’s retirement and Trisha’s share by goodwill was adjusted through the Capital Accounts of remaining partners.

(iv) New profit sharing ratio between the remaining partners was agreed at 2:3.

(v) Trisha was paid ₹ 50,000 on retirement and the balance was transferred to her loan account.

Pass necessary journal entries in the books of the firm on Trisha’s retirement.

Marks-6, CBSE: 2023-24/Compartment/Set-1/Q-26b*

Answer :

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