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6 27,000 6) The Balance Sheet of A, B and C on 31 December, 2020, the date of A's retirement, was as follows: Liabilities Amount
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27,000 6) The Balance Sheet of A, B and C on 31" December, 2020, the date of A's retirement, was as follows: Liabilities Amount Assets Amount Capital Accounts: Goodwill 15,000 A 40,000 Land and buildings 40,000 B 40,000 Plant and Machinery 28,000 C 39.000 1.10,000 Motor car Sundry Debtors 24,000 Sundry Creditors 25,000 Cash at Bank 1,000 1,35,000 1,35,000 The following terms have been agreed upon: a) Goodwill should be valued at Rs. 21,000. b) The value of land and building should be appreciated to Rs. 50,000 e) Plant and Machinery should be reduced to Rs. 23,000. d) Create provision at 5% on debtors for bad and doubtful debts. e) Create provision for discount of Rs.700 on creditors. 1) The entire sum payable to A is to be brought by B and C in such a manner that their capital accounts are in the proportion to their profit sharing ratio, which is to be equal. Pass Journal entries to record the above and prepare Balance Sheet of the new firm Step by Step Solution
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