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Varun, Jagdish and Tarun were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1 Balance Sheet of the firm as at 31st March, 2023 was as follows:

Liabilities Assets  

Sundry Creditors

Bills Payable

Reserve

Capital A/cs:

Varun

Jagdish

Tarun

25,000

12,000

15,000

40,000

40,000

30,000

Cash

Sundry Debtors

Less: PDD

Closing Stock

Furniture

Plant and Machinery

Building

20,000

1,000

3,000

19,000

30,000

10,000

40,000

60,000

  1,62,000     1,62,000

On 1st April, 2023, Jagdish retired. The terms of retirement were following:

(i) Goodwill of the firm was to be valued at ₹ 20,000.

(ii) Furniture and Plant and Machinery were to be reduced by 10% and 5% respectively.

(iii) Stock and Building were to be appreciated by 20% and 10% respectively.

(iv) Provision for Doubtful Debts was to be increased to ₹ 1,500.

(v) Amount due to Jagdish was to be transferred to his Loan Account earning interest @ 10% p.a.

Show Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the firm after Jagdish’s retirement.

Anurag Pathak Changed status to publish March 3, 2024
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