C Rs. Particulars By Huda's Capital A/C By Balance cld 28200 29.000 Particulars To Balance b/d To Malik's Capital A/C To Dabas's Capital Alc 29.000 2.500 25.700 57200 57,200 29,000 To Balance bld 5,000 (iii) Treatment of Goodwill Dr. 5.000 Dabas's Capital Alc To Huda's Capital A/C (Being Huda's share of goodwill adjusted to the capital account of Dabas) ILLUSTRATION 4 (Retirement of a Partner) P. Q and R are partners sharing profit and K27 losses in the ratio of 3:2:1. On 31.3.2010 the Balance Sheet was as under: - BALANCE SHEET as at 31.3.2010 Liabilities Rs. Assets Rs. Creditors 13.000 Cash 2,000 Investment Fluctuation Reserve 3.000 Debtors 14.000 P's Capital 30.000 Less : Provision 800 13.200 Q's Capital 16,000 Stock 12,800 R's Capital 33.000 Investments 5.000 Land and Building 27.000 Plant and Machinery 35.000 95,000 95,000 On the same date, R retired and the following adjustment was to made:- (a) That an amount of Rs.1,100 included in Sundry Debtors be written off as no longer receivable, Provision to be continued Rs.800. (b) That Stock be written down by Rs. 1,000. (c) That Land and Building be written up by Rs. 47,000. (d) That Plant and Machinery be reduced to Rs. 34.000. (e) That an amount of Rs 1.700 included in Sundry Creditors be written back as no longer payable. Goodwill was valued at Rs.18,000 and retiring partner's share of the same be adjusted into the accounts of remaining partners (no goodwill account being raised). That a provision of Rs 600 be made for an Outstanding Repair Bill. (h) That Investment be decreased to Rs.3,800. (i) That R was to be paid through cash brought in by P and Q in such a way as to make their capital proportionate to their new profit sharing ratio, which was to be 3: 2. Prepare Revaluation Account, Partners' Capital Accounts, Cash Account and Balance (8) Sheet after R's Retirement