Ekta, Jagniti and Kiran are partners sharing profits and losses in the ratio of 5 : 3 : 2. On 31st March 2026, their Balance Sheet as under:
Ekta, Jagniti and Kiran are partners sharing profits and losses in the ratio of 5 : 3 : 2. On 31st March 2026, their Balance Sheet as under:
On the above date, Jagniti retired and Ekta and Kiran agreed to continue the business on the following terms:
(I) Goodwill of the firm be valued at ₹ 75,000.
(ii) That fixed assets be appreciated by 20%.
(iii) That stock be reduced to ₹ 50,000.
(iv) Workmen Compensation claim of ₹ 10,000 to be adjusted against the Workmen Compensation Reserve. The balance of the reserve is to be carried in the Balance Sheet.
(v) That Jagniti be paid through amount brought by Ekta and Kiran in a manner that their Capitals are in their new profit-shring ratio which is to be Ekta 3.5 and Kiran 2/5.
You are required to prepare:
(i) Partner’s Capital Accounts, and
(ii) Balance Sheet of Ekta and Kiran.
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors | 30,000 | Bank | 20,000 |
| Workmen’s Compensation Reserve | 25,000 | Debtors | 65,000 |
| Capital A/cs: Ekta Jagniti Kiran | 1,10,000 56,000 44,000 | Stock | 55,000 |
| Fixed Assets | 1,25,000 | ||
| 2,65,000 | 2,65,000 |
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