Question

Given below is the balance sheet of Vaishali, Madhuri and Shobha, who were sharing profits and losses in the ratio of 3 : 3 : 2.

                                                           Balance Sheet as on

                                                             31st March, 2012

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Creditors	34800	Cash	21600
Bills Payable	8800	Machinery	34800
Capital A/c         Vaishali         Madhuri         Shobha	48000 52000 36000	Debtors	50000
Reserved Fund	16000	Stock	25200
		Furniture	16000
		Building	48000
	195600		195600

 

On 1st April, 2012 Shobha retired from the firm on the following terms:

1. Assets be revalued as under:

Stock Rs. 24,000, Machinery Rs. 32,000, Furniture Rs. 16,800.

2. R.D.D. be maintained at 4% on debtors.

3. An item of Rs. 400 from creditors is no longer a liability and hence should be properly adjusted.

4. The amount due to Shobha be transferred to her loan account.

Pass necessary Journal Entries in the books of the firm.

Answer 1

Journal Entries In the books of Vaishali, Madhuri and Shobha

Date	Particulars	LF	Debit	Credit
1.4.12	Reserve Fund A/c .... Dr.		16000
	To Vaishali’s Capital A/c			6000
	To Madhuri’s Capital Account			6000
	To Shobha’s Capital A/c			4000
	[Being the Reserve Fund is transferred. ]
1.4.12	Revaluation A/c ..... Dr.		1200
	To Stock A/c			1200
	[Being the stock is depreciated]
1.4.12	Revaluation A/c .... Dr.		2800
	To Machinery A/c			2800
	[Being the Machinery is depreciated]
1.4.12	Furniture A/c .... Dr.		800
	To Revaluation A/c			800
	[Being the furniture is appreciated]
1.4.12	Revaluation A/c .... Dr.		2000
	To R.D.D. A/c			2000
	[Being the R.D.D. is charged]
1.4.12	Creditors A/c .... Dr.		400
	To REvaluation A/c			400
	[Being discount received on creditors]
1.4.12	Vaishali’s Capital A/c .... Dr.		1800
	Madhuri’s Capital A/c .... Dr.		1800
	Shobha’s Capital A/c .... Dr.		1200
	To Revaluation A/c			4800
	[Being the loss made on Revaluation ]
1.4.12	Shobha’s Capital A/c ..... Dr.		38800
	To Shobha’s Loan A/c			38800
	[Being the balance due to retiring partner is transferred to her loan account]