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Question -

Radha, Sheela and Meena were in partnership sharing profits and losses in the proportion of 3:2:1. On April 1, 2017, Sheela retires from the firm. On that date, their Balance Sheet was as follows:

Liabilities

Amount

Rs

Assets

Amount

Rs

Trade Creditors

 

3,000

Cash-in-Hand

1,500

Bills Payable

 

4,500

Cash at Bank

7,500

Expenses Owing

 

4,500

Debtors

15,000

General Reserve

 

13,500

Stock

12,000

Capitals:

 

 

Factory Premises

22,500

Radha

15,000

 

Machinery

8,000

Sheela

15,000

 

Losse Tools

4,000

Meena

15,000

45,000

 

 

 

 

70,500

 

70,500

 

 

 

 

 
The terms were:
a) Goodwill of the firm was valued at Rs 13,500.
b) Expenses owing to be brought down to Rs 3,750.
c) Machinery and Loose Tools are to be valued at 10% less than their book value.
d) Factory premises are to be revalued at Rs 24,300.
Prepare:
1. Revaluation account
2. Partner’s capital accounts and
3. Balance sheet of the firm after retirement of Sheela.



Answer -


Books of Radha and Meena 

Revaluation Account

 

Dr.

Cr.

 

Particulars

Amount

Rs

Particulars

Amount

Rs

Machinery

800

Expenses Owing

750

Loose Tools

400

Factory Premises

1,800

Profit transferred to Capital Account:

 

 

 

Meena

675

 

 

 

Radha

450

 

 

 

Sheela

225

1,350

 

 

 

2,550

 

2,550

 

 

 

 

 

 

 

 

 

 

  

Parters’ Capital Account

 

Dr.

Cr.

 

Particulars

Radha

Sheela

Meena

Particulars

Radha

Sheela

Meena

Sheela’s Capital A/c

3,375

 

1,125

Balance b/d

15,000

15,000

15,000

Sheela’s Loan A/c

 

24,450

 

General Reserve

6,750

4,500

2,250

Balance c/d

19,050

 

16,350

Revaluation (Profit)

675

450

225

 

 

 

 

Radha’s Capital A/c

 

3,375

 

 

 

 

 

Meena’s Capital A/c

 

1,125

 

 

22,425

24,450

17,475

 

22,425

24,450

17,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet as on April 01, 2017

 

 

Liabilities

Amount

Rs

Assets

Amount

Rs

Trade Creditors

 

3,000

Cash in Hand

1,500

Bills Payable

 

4,500

Cash at Bank

7,500

Expenses Owing

 

3,750

Debtors

15,000

Sheela’s Loan

 

24,450

Stock

12,000

 

 

 

Factory Premises

24,300

Capitals:

 

 

Machinery

8,000

 

Radha

19,050

 

Less: 10%

(800)

7,200

Meena

16,350

35,400

Loose Tools

4,000

 

 

 

 

Less: 10%

(400)

3,600

 

 

71,100

 

71,100

 

 

 

 

 

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