1.000 Profit and Loss (Suspense) A/C General Reserve Prateek's Capital 4,571 4.800 Q6: Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 1/2, 1/6 and 1/3 respectively. The Balance Sheet on April 1, 2007 was as follows: Books of Suri, Narang and Bajaj n 43 Balance Sheet as on April 1, 2007 Amount Amount Liabilities Bills Payable Sundry Creditors Reserves Capital Accounts: Narang Suri Bajaj Rs 40,000 30,000 12.000 22.000 Rs Assets 12,000 Freehold Premises 18,000 Machinery 12.000 Furniture Stock Sundry Debtors Less: Reserve 88,000 for Bad Debt Cash 1,30,000 30,000 30,000* 28.000 20,000 1.000 19.000 7.000 1.30.000 Bajaj retires from the business and the partners agree to the following: a) Freehold premises and stock are to be appreciated by 20% and 15% respectively. b) Machinery and furniture are to be depreciated by 10% and 7% respectively. c) Bad Debts reserve is to be increased to Rs 1,500. d) Goodwill is valued at Rs 21,000 on Bajaj's retirement. e) The continuing partners have decided to adjust their capitals in their new profit sharing ratio after retirement of Bajaj. Surplus/deficit, if any, in their capital accounts will be adjusted through current accounts. Prepare necessary ledger accounts and draw the Balance Sheet of the reconstituted firm. *In the given Question Suri's Capital is Rs 30,000 instead of Rs 20,000