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Amit, Balan and Chander were partners in a firm sharing profits in the proportion of 1/2, 1/3 and 1/6 respectively. Chander retired on 1st April, 2014. The Balance Sheet of the firm on the date of Chander’s retirement was as follows:

Liabilities Assets
Sundry Creditors

Employee’s Provident Fund

General Reserve

Capital A/cs:

Amit

Balan

Chander

12,600

3,000

9,000

40,000

36,500

20,000

Bank

Debtors
Less: Provision

Stock

Investments

Patents

Machinery

 

30,000
1,000

 

4,100

29,000

25,000

10,000

5,000

48,000

1,21,100 1,21,100

It was agreed that:

i) Goodwill will be valued at ₹ 27,000.

ii) Depreciation of 10% was to be provided on Machinery

iii) Patents were to be reduced by 20%.

iv) An old photocopier previously written off was sold for ₹ 600.

v) Chander took over investments for ₹ 15,800.

vi) Amit and Balan decided to adjust their capitals in proportion of their profit sharing ratio by opening current accounts.

Prepare Revaluation Account and Partner’s Capital Accounts on Chander’s retirement.

[Ans.: Gain (Profit) on Revaluation – ₹ 600; Chander’s Loan A/c – ₹ 10,300; Partner’s Capital Accounts: Amit – ₹ 48,000; Balan – ₹ 32,000. Current Accounts: Amit – ₹ 5,900 (Dr.); Balan – ₹ 5,900 (Cr.).]

Anurag Pathak Changed status to publish June 23, 2023
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