On 31st March, 2022 the Balance Sheet of M/s A, B and C sharing profits and losses in proportion to their fixed Capitals stood as follows:

On 31st March, 2022 the Balance Sheet of M/s A, B and C sharing profits and losses in proportion to their fixed Capitals stood as follows:

Liabilities	₹	Assets	₹
Creditors	1,08,000	Cash at Bank	80,000
General Reserve	1,80,000	Debtors 1,00,000 Less: Provision 2,000	98,000
Capital A/cs: A B C	3,60,000 2,40,000 1,20,000	Stock	90,000
		Machinery	2,40,000
		Land and Buildings	5,00,000
	10,08,000		10,08,000

On 1st April, 2022, B wants to retire from the firm and the remaining partners decide to carry on. The following re-adjustments of assets and liabilities have been agreed upon before the ascertainment of the amount payable to B: (i) that, out of the Fire Insurance Premium paid during 2021-22, ₹ 10,000 be carried forward as unexpired. (ii) that the land and Buildings be appreciated by 10%. (iii) that provision for doubtful debts be brought up to 5% on debtors. (iv) that the machinery be depreciated by 5%. (v) that a provision for ₹ 15,000 be made in respect of an outstanding bill for repairs. (vi) that the goodwill of the entire firm be at ₹ 1,80,000 and B’s share of the same adjusted in the A/cs of A and C who share future profits in the proportion of 3/4th and 1/4th respectively; and (vii) that B be paid ₹ 50,000 in cash and the balance be transferred to his Loan A/c. Prepare Revaluation A/c, Partner’s Current Accounts, Capital Accounts and the Balance sheet of the firm of A and C. [Ans. Gain on Revaluation ₹ 30,000; B’s Loan A/c ₹ 3,20,000; Current Accounts: A ₹ 60,000 (Cr.) and C ₹ 20,000 (Cr.); Capital : A ₹ 3,60,000; C ₹ 1,20,000; B/S Total ₹ 10,03,000]