Chintan, Ayush and Sudha were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. on 31st March, 2019, their Balance Sheet was as follows:
Chintan, Ayush and Sudha were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. on 31st March, 2019, their Balance Sheet was as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Capitals:
Chintan Ayush Sudha Provident Fund General Reserve Creditors |
90,000 60,000 40,000 30,000 20,000 10,000 |
Plant and Machinery
Furniture Stock Debtors Cash at Bank |
60,000
|
90,000 60,000 30,000 55,000 15,000 |
| 2,50,000 | 2,50,000 |
Chintan retired on the above date and it was agreed that:
a) Debtors of ₹ 5,000 were to be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts was to be created.
b) Goodwill of the firm on Chintan’s retirement was valued at ₹ 1,00,000 and Chintan’s share of the same will be adjusted by debiting the Capital Accounts of Ayush and Sudha.
c) Stock was revalued at ₹ 36,000.
d) Furniture was undervalued by ₹ 9,000.
e) Liability for Workmen’s Compensation of ₹ 2,000 was to be created.
f) Chintan was to be Paid ₹ 20,000 by cheque and the balance was to be transferred to his loan account.
Pass the necessary Journal entries in the books of the firm on Chintan’s retirement.
Anurag Pathak Changed status to publish June 22, 2023
