Ashish, Vinit and Reema were partners sharing profits and losses in the ratio of 2:2:1. Their Balance Sheet on 31st March, 2024 was as follows:
Balance sheet of Ashish, Vinit and Reema as at 31st March, 2024
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
|---|---|---|---|---|---|
| Capitals: | Patents | 80,000 | |||
| Ashish | 2,00,000 | Furniture | 3,00,000 | ||
| Vinit | 2,00,000 | Stock | 1,70,000 | ||
| Reema | 1,00,000 | 5,00,000 | Debtors | 80,000 | |
| General Reserve | 50,000 | Less: Provision for doubtful debts | 8,000 |
72,000 |
|
| Bills Payable | 80,000 | Cash | 80,000 | ||
| Creditors | 40,000 | ||||
| 6,70,000 | 6,70,000 |
On the above date, Vinit retired on the following terms:
- Goodwill of the firm was valued at ₹60,000 and the same was adjusted into the capital accounts of Ashish and Reema who will share profits in future in the ratio of 3:2.
- Value of stock was to be reduced by ₹10,000.
- Patents are found undervalued by 20%.
- Vinit was paid ₹20,000 immediately on retirement and the balance was transferred to his loan account carrying interest @ 8% p.a.
Pass necessary journal entries on Vinit’s retirement.
Marks-6, CBSE: 2024-2/Zone-1/Set-1/Q-26(b)
Answer :
