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The Balance Sheet of Asha, Deepa and Lata who were sharing profits in the ratio of 5 : 3 : 2 as at 31st March, 2023 is as follows:

Liabilities Assets
Creditors

Employee’s Provident Fund

Profit & Loss A/c

Capital A/cs:

Asha

Deepa

Lata

50,000

10,000

85,000

40,000

62,000

33,000

Cash at Bank

Sundry Debtors

Stock

Fixed Assets

40,000

1,00,000

80,000

60,000

2,80,000 2,80,000

Asha retired on 1st April, 2023 and Deepa and Lata decided to share profits in future in the ratio of 3 : 2 respectively.

The other terms on retirement were:

a) Goodwill of the firm is to be valued at ₹ 80,000.

b) Fixed Assets are to be depreciated to ₹ 57,500.

c) Make a provision for Doubtful Debts at 5% on Debtors

d) A liability for claim, included in Creditors for ₹ 10,000, is settled at ₹ 8,000.

The amount to be paid to Asha by Deepa and Lata in such a way that their capitals are proportionate to their profit sharing ratio and leave a balance of ₹ 15,000 in the Bank Account.

Prepare Revaluation Account and Partner’s Capital Accounts

Anurag Pathak Changed status to publish June 24, 2023
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