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Amrit, Ajit and Ansh are partners sharing profits and losses in the ratio of 1/2, 1/3, and 1/6 respectively. The firm’s Balance Sheet as at 31st March 2023 was as follows:

Liabilities Assets  

Sundry Creditors

Bills Payable

General Reserve

Capital A/cs:

Amrit

Ajit

Ansh

19,000

5,000

12,000

40,000

30,000

25,000

Cash at Bank

Debtors

Less: Provision for Doubtful Debts

Stock

Motor Vans

Plant and Machinery

Factory Building

 

16,000

500

2,500

15,500

25,000

8,000

35,000

45,000

  1,31,000     1,31,000

Ajit retires on 1st April, 2023, subject to the following adjustments:

(i) Goodwill of the firm to be valued at ₹ 18,000.

(ii) Plant and Machinery to be reduced by 10% and Motor Vans by 15%.

(iii) Stock to be appreciated by 20% and Building by 10%.

(iv) Provision for Doubtful Debts to be increased by ₹ 1,950.

(v) That out of the fire insurance premium paid during the year, ₹ 2,500 be carried forward as unexpired.

(vi) that a provision of ₹ 2,500 be made in respect of outstanding bill for repairs.

Prepare Revaluation Account and Ajit’s Capital Account.

Anurag Pathak Changed status to publish March 3, 2024
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