Kavya, Manya and Navita were partners sharing profits as 50%, 30% and 20% respectively. On 31-3-2016, their Balance sheet was as under:

Kavya, Manya and Navita were partners sharing profits as 50%, 30% and 20% respectively. On 31-3-2016, their Balance sheet was as under:

Liabilities	₹	Assets	₹
Creditors	1,40,000	Fixed Assets	8,90,000
General Reserve	1,00,000	Investments	2,00,000
Capitals: Kavya Manya Navita	6,00,000 5,00,000 4,00,000	Stock	1,30,000
		Debtors 4,00,000 Less: Provision for Bad Debts 30,000	3,70,000
		Bank	1,50,000
	17,40,000		17,40,000

On the above date, Kavya retired and Manya and Navita agreed to continue the business on the following terms: (a0 Firm’s goodwill was valued at ₹ 60,000 and it was decided to adjust Kavya’s share of goodwill in the capital accounts of continuing partners. (b) There was a claim for workmen’s compensation to the extent of ₹ 4,000. (c) Investments were revalued at ₹ 2,13,000. (d) Fixed Assets were to be depreciated by 10%. (e) Kavya was to be paid ₹ 20,000 through a bank draft and the balance was transferred to her loan account which will be paid in two equal annual instalments together with interest @ 10% p.a. Prepare Revaluation A/c, Partner’s Capital Accounts and Kavya’s Loan Account till it is finally paid. [Ans. Loss on Revaluation ₹ 80,000; Kavya’s Loan ₹ 6,20,000; Capital A/cs : Manya ₹ 4,88,000 and Navita ₹ 3,92,000. Amount paid on 31st March 2017 : ₹ 3,10,000 + Interest ₹ 62,000. Amount paid on 31st March 2018 : ₹ 3,10,000 + Interest ₹ 31,000]