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Ashok, Bhaskar and Chaman are partners in a firm, sharing profits and losses as Ashok 1/3, Bhaskar 1/2, and Chaman 1/6 respectively. The Balance sheet of the firm as at 31st March, 2023 was:

Liabilities Assets
Capital A/cs:

Ashok

Bhaskar

Chaman

General Reserve

Sundry Creditors

Loan Payable

 

3,00,000

4,00,000

2,50,000

2,20,000

2,50,000

1,50,000

Building

Plant and Machinery

Furniture

Stock

Debtors
Less: Provision for Doubtful Debts

Cash in Hand

Advertisement Suspense Account

 

 

 

 

1,80,000
5,000

5,00,000

4,00,000

1,00,000

2,50,000

1,75,000

85,000

60,000

15,70,000  15,70,000

Chaman retired on 1st April, 2023 subject to the following adjustments:

a) Goodwill of the firm be valued at ₹ 2,40,000. Chaman’s share of goodwill be adjusted into the capital accounts of Ashok and Bhaskar who will share future profits in the ratio of 3 : 2.

b) Plant and Machinery to be reduced by 10% and Furniture by 5%.

c) Stock to be increased by 15% and Building by 10%.

d) Provision for doubtful Debts to be raised to ₹ 20,000.

Prepare Revaluation Account, Capital Account of Chaman and the Balance Sheet of the firm after Chaman’s retirement.

Anurag Pathak Changed status to publish June 22, 2023
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