978 Illustration 11 A, B and C are in partnership as accountants carrying on practices in Calcutta and Delhi and sharing profits in the ratio of 7:6:5 respectively. Interest @ 5% p.a. is allowed on capital accounts. They decided to dissolve the firm. The terms of dissolution were as under: 1. A to retire from business, his share of goodwill being valued at 3,300 to be paid by B and C in their profit-sharing ratio. 2. B to carry on business in Calcutta, taking over at book values furniture and debtors in Calcutta, and all liabilities, he also has to pay 600 for the lease of Calcutta office which he kept on. 3. C to take over the furniture and debtors in Delhi. 4. B and C each to be credited with 2% of the amount of the book debts taken over by them respectively by way of an allowance to cover the cost of collection. 5. Each parnter to take over a third of the cash balance and to pay his own costs in connection with the dissolution. The following Trial Balance was extracted from the firm's books as on 30.6.2018, on which date the partnership was dissolved by agreement. Dr. Trial Balance Particulars Particulars Drawings: A 3,973 Capital as on 1.7.2017 B 1,292 4,000 B 4,000 Cash 3,000 Sundry Debtors: Calcutta 6,750 Profit & Loss Account before charging interest for the Sundry Debtors: Delhi 3,150 year ended 30.6.2018 5,716 Furniture : Calcutta 320 Sundry Creditors Furniture : Delhi 16,794 16,794 You are required to close the books of the firm, assuming that partners settle their accounts through bank on 30.9.2016. Interest after 30.6.2018 to be ignored. Cr 816 318 78 175