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Vineet, Neeti and Umeed are partners sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2023 was as follows:

Liabilities Assets

Capital A/cs:

Vineet

Neeti

Umeed

General Reserve

Workmen Compensation Reserve

Creditors

 

9,00,000

7,00,000

5,00,000

3,30,000

2,40,000

4,10,000

Building

Plant

Furniture

Stock

Debtors

Cash at Bank

Advertisement Suspense A/c

10,00,000

8,00,000

80,000

5,00,000

6,00,000

70,000

30,000

  30,80,000   30,80,000

Umeed retired on 1st April, 2023 and for that purpose:

(i) Goodwill of the firm valued at ₹ 7,20,000. Umeed’s share is to be adjusted in the accounts of Vineet and Neeti.

(ii) Based on Expert’s Valuation, Building to be appreciated by 20% and Plant to be reduced by 10%. He was paid a fee of ₹ 4,000.

(iii) Furniture is to be reduced by ₹ 8,000.

(iv) Provision for Doubtful Debts is to be created @ 5% on debtors.

Vineet and Neeti are to bring in cash in their profit sharing ratio to pay Umeed’s dues on retirement.and leave a sum of ₹ 60,000 as Cash in Hand.

You are required to prepare Revaluation Account. Bank Account , Partner’s Capita Accounts and Balance Sheet of the new firm as at 1st April, 2023.

Anurag Pathak Changed status to publish March 3, 2024
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