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X Illustration-2 Lalitha, Jothi and Kanaga were partners of a firm sharing profit and losses in the ratio of 3:2:3. Set out below was their balance sheet as on 31st March 2003. Balance Sheet Rs. 750 2,04,500 89.000 Liabilities Bills payable Sundry Creditors Capitals: Lalitha 2,00,000 Jothi 1.25.000 Kanaga 1.50,000 Profit & Loss Alc Outstanding expenses Rs. Assets 32,000 Cash in Hand 62.500 Cash at Bank Book-debts Stock Furniture 4,75,000 Plant & Machinery 22,000 Building 500 1.11,500 17,500 48,750 1.20,000 5,92,000 592,000 Lalitha retired from the partnership on 1st April 2004 on the following terms: 1. Goodwill of the firm was to be valued at R.O 30,000 2. The assets are to be valued as under: Stock R.O 1,00,000; Furniture R.O 15,000; Plant and Machinery R.O 45,000; Building R.O 1,00,000. 3. A provision for doubtful debts be created at R.O 4,250. 4. Lalitha was to be paid off immediately Show the journal entries, prepare revaluation account, capital accounts, Bank account and balance sheet of the reconstituted partnership. Page 2 of 12 Reply