1. Q.1 P, Q and R are partners in a firm sharing profits in the ratio of 4:4:2 Partners are entitled to interest on capital 8% per annum and Salaries of 140 per month. The Following balances were extracted from their books on 30th March , 2020. Prepare Profit and Loss Account for the year ended 30th May, 2021 and a Balance Sheet as at that date. In doing so the following adjustments are required to be made. P's Capital P's Drawings Q's Capital Q's Drawings R's Capital R's Drawings Salaries Computer Purchases Sales Buildings Commission Dr. Advertising General Charges Interest Cr. Bad debts Taxes and Insurance Furniture Repairs Factory Expenses Opening Stock of Raw Material Bank Balance Office expense Sundry Debtors Sundry Creditors Bills Receivable Loan @5.5% 30,000 1,125 25,000 1,000 15,000 1,500 4,965 32,100 79,085 142,235 36,870 1,060 1,075 2,670 200 625 1,235 1,000 1,245 25,785 18,995 5,745 1,730 15,710 4,300 4,465 21,250 1. Closing stock was Valued RO 36,000 2. Write off depreciation on computer at 12.5%, on Buildings at 5% and on Building at 10% and on Furniture @5%. 3. Further Bad debts RO 1,000 4. RO 1,800 for factory expenses and RO 1,000 for salaries are outstanding. 2. The Following was the balance sheet of Khan, Ismail and Nandy who share profits and losses in the proportion of One half, one third and one sixth respectively. Liabilities Amount Assets Amount (RO) (RO) Creditors 5,000 Land and Buildings 48,000 Capital Machinery 7,000 Khan 57,000 Stock 29,000 Ismail 32,000 Debtors 25,200 Nandy 16,000 Cash 800 110,000 110,000 They agreed to take Ashish into partnership as from 1st January 2020, giving him 1/6th share in the profits on the following terms: a. That Ashish should bring in RO 3,000 as Goodwill and RO 8,000 as his capital b. That Machinery be depreciated by 12 percent and Stock by 10 percent c. That a provision for 5 percent be created for doubtful debts d. That the value of Land and Buildings be brought upto RO 62,000 Record Necessary Journal Entries and Prepare Revaluation accounts, partners' capital accounts and Balance sheet of the new firm. 3. A, B and C are partners sharing profits and losses equally. The balance sheet at 31st December 2020 is as follows. Liabilities Amount Assets Amount (RO) (RO) Creditors 5,000 Cash at Bank 3,000 Reserves 6,000 C's Current Account 2,500 Current Accounts Bills Receivable 5,000 A 2,000 Debtors B 3,000 20,000 19,000 Less: Provision 18,000 Capital 1,000 3,500 A 10,000 Stock B 15,000 Fixtures 10,000 51,000 51,000 C retires in that date and the following adjustment are to be made for the purpose a. Goodwill is to be valued at RO 12,000 b. Fixtures to be depreciated by 5% c. Stock to be appreciated by 10% d. Bad debts provision is to be increase by RO 500 The amount due to C be transferred to his loan account. Pass Journal entries, open partners' capital accounts and revaluation account and prepare the opening balance sheet of continuing partners