A, B and C are partners sharing profits and losses in the ratio of 3 : 2

Question:

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. The Balance Sheet of their business as on 31.3.2018 is given below:

A retired w.e.f. 1.4.2018. Goodwill of the firm was valued at ₹24,000. On revaluation, machinery and furniture are to be appreciated by 10%. Debtors include ₹1,500 as bad and doubtful and are to be written-off. Value of stock is to be reduced to ₹23,000. Creditors include ₹800 as no more payable. It was decided that due effect is to be given to the retiring partners’ capital account as his share of goodwill without raising any goodwill account. B and C are to share the future profits in equal proportions. Amounts payable to A is to be treated as a loan to the firm. You are required to prepare the Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the firm after A’s retirement.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting Volume II

ISBN: 9789387886230

4th Edition

Authors: Mohamed Hanif, Amitabha Mukherjee

Question Posted: