Question 1 Dharma, Raja and Lela are partners sharing profit and losses in the ratio of 3:2:1 respectively. The statement of financial position as on March 31, 2021 was as follows: ASSETS RM RM Plant and machinery 37,600 Building 24,000 Trade receivables 24,800 less: Provision for Doubtful Debts 2,400 22,400 Inventories 18,400 Bank 32,240 134,640 Liabilities and Equity Trade payables 31,200 Loan - Dharma 10,000 Capital: Dharma 51,840 Raja 27,360 Lela 14,240 134,640 Dharma retired on March 31, 2021 and Raja and Lela continued in partnership sharing profit and losses in the ratio of 2:1. Dharma was repaid RM20,000 on 1 April 2021 and it was agreed that the remaining balance due to him should be kept as his loan to the firm. For the purpose of Dharmas retirement, it was agreed that: 1. Building be revalued at RM48,000 and Plant and Machinery at RM31,600. 2. The provision for doubtful debts was to be increased by RM800. 3. A provision of RM1,000 included in trade payables was no longer required. 4. RM2,400 was to be written off from the inventories in respect of damaged items included therein. 5. A provision of RM8,480 made in respect of outstanding legal charges. 6. The goodwill of the firm to be valued at RM28.800. Required: (a) Prepare revaluation account, goodwill account, capital account of partners and statement of financial position as at 1 April 2021. (21 marks) (b) State any FOUR (4) reasons that goodwill exists in the business. (4 marks) [Total: 25 Marks]