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The Balance Sheet of Sanjiv, Rajiv and Satish is as follows:

Liabilities Assets  

Trade Creditors

Capital A/cs:

Sanjiv

Rajiv

Satish

70,000

1,25,750

1,00,000

85,000

Freehold Property

Plant

Stock

Sundry Debtors

Less: PDD

Cash at Bank

62,500

1,000

90,000

1,50,000

55,000

61,500

24,250

  3,80,750     3,80,750

Rajiv agrees to take over the business. Sanjiv and Satish retiring on the following terms:

(i) Goodwill of the firm be valued at ₹ 75,000.

(ii) Plant and Stock be reduced by 10%.

(iii) Freehold Property be appreciated by ₹ 10,000.

(iv) Provision for Doubtful Debts be brought up to ₹ 2,500.

(v) Rajiv has to bring in sufficient cash to pay off Sanjiv and Satish. The partners used to share profits in the proportion of 2/5, 2/5 and 1/5.

Show necessary Journal entries, Partner’s Capital Accounts and Balance Sheet of Rajiv after retirement of Sanjiv and Satish.

Anurag Pathak Changed status to publish March 3, 2024
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