Vijay, Vinod and Yogi were partners sharing profits in the ratio of 1/2, 1/3 and 1/6 respectively. Balance Sheet of the firm as at 31st March, 2023 was as follows:
Liabilities Assets
Trade Creditors Workmen Compensation Reserve Investments Fluctuation Reserve Employee’s Provident Fund Vijay’s Capital Vinod’s Capital Yogi’s Capital 15,000 12,000 6,000 6,000 68,000 32,000 21,000 Cash at Bank Debtors Less: PDD Stock Investments (Market Value ₹ 17,600) Patents Plant and Machinery Profit and Loss A/c (2022-23) 5,750 38,000 30,000 15,000 10,000 50,000 11,250
1,60,000 1,60,000
Yogi retired on 1st April, 2023 on the following terms: (i) Goodwill of the firm was valued at ₹ 30,000. (ii) Value of the Patents was to be reduced by 20% and that of Plant and Machinery to 90%. (iii) Provision for Doubtful Debts was to be raised to 6%. (iv) Liability for Workmen Compensation to the extent of ₹ 3,000 is to be created. (v) Yogi took over the investments at market value. (vi) Trade creditors allowed discount of ₹ 3,600 due to defective goods. (vii) Amount due to Yogi is to be settled on the following basis: 50% on retirement, 50% of the balance within one year and the balance by a bill of exchange (without interest) at 3 months. You are required to show Journal entries for the treatment of Goodwill, Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of Vijay and Vinod after Yogi’s retirement.
Anurag Pathak Changed status to publish March 3, 2024
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