Ram, Shyam and Mohan are partners sharing profits in the ratio of 5 : 3 : 2. Mohan retired on 1st April, 2023 from business
Ram, Shyam and Mohan are partners sharing profits in the ratio of 5 : 3 : 2. Mohan retired on 1st April, 2023 from business. The Balance Sheet stood as at 31st March, 2023 as under:
| Liabilities | ₹ | Assets | ₹ |
|
Trade Creditors Bills Payable General Reserve Workmen Compensation Reserve Capital A/cs: Ram Shyam Mohan |
1,98,000 92,500 1,00,000 67,500 4,00,000 6,00,000 2,00,000 |
Cash Bank Sundry Debtors Stock Furniture Computers Plant and Machinery Land and Building Investments |
85,000 1,31,500 3,40,000 1,81,000 1,82,500 1,32,000 2,02,300 2,60,000 1,43,700 |
| Â | 16,58,000 | Â | 16,58,000 |
(i) The assets on Mohan’s retirement are to be revalued as follows:
| Stock | 2,00,000 |
| Plant and Machinery | 2,35,300 |
| Land and Building | 2,00,000 |
| Furniture | 1,42,500 |
(ii) A sum of ₹ 17,000 is to be written off from Sundry Debtors.
(iii) Goodwill of the firm be valued t ₹ 90,000 and Mohan’s share in it be adjusted into the Capital Accounts of Ram and Shyam.
The continuing partners agreed to pay ₹ 1,65,000 on retirement of Mohan, to be contributed by the continuing partners in their new profit sharing ratio which is 3 : 2. The balance in the Capital Account of Mohan is to be taken as Loan.
Give Journal entries, prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of reconstituted firm. 
Anurag Pathak Changed status to publish March 3, 2024
