Ratan, Singh and Sharma were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. Their Balance Sheet on 31st March, 2024 was as follows:
Balance Sheet of Ratan, Singh and Sharma as at 31st March, 2024
| Liabilities | Amount (₹) | Assets | Amount (₹) | ||
|---|---|---|---|---|---|
| Creditors | 90,000 | Bank | 65,000 | ||
| Outstanding Wages | 10,000 | Stock | 1,50,000 | ||
| General Reserve | 3,00,000 | Debtors | 90,000 | ||
| Capitals: | Less: Provision for Doubtful Debts | 5,000 | 85,000 | ||
| Ratan | 3,60,000 | Plant and Machinery | 2,50,000 | ||
| Singh | 2,40,000 | Land and Building | 4,50,000 | ||
| Sharma | 1,00,000 | 7,00,000 | Profit and Loss A/c | 1,00,000 | |
| Total | 11,00,000 | Total | 11,00,000 | ||
On 1st April, 2024 Sharma retired from the firm on the following terms:
- Plant and Machinery is revalued at ₹2,00,000.
- Land and Building was to be appreciated by ₹49,500 and provision for bad debts will be maintained at 5% of the debtors.
- Sharma’s share in the goodwill of the firm was valued at ₹60,000 and the retiring partner’s share was adjusted through the capital accounts of remaining partners.
- Sharma was paid in cash brought by Ratan and Singh in such a way so as to make their capitals proportionate to their new profit-sharing ratio.
Marks-6, CBSE: 2024-25/Zone-6/Set-1/Q-24(a)
Answer :
