Question

Manju, Chara’and Lavanya are partners in firm sharing profits and losses in the ratio of 5:3:2. The balance sheet as of 31st March, 2018 was as follows:

Liabilities	₹	₹	Assets	₹
Capital accounts:		1,30,000	Buildings	1,00,000
Manju	70,000		Furniture	80,000
Charu	70,000		Stock	60,000
Lavanya	70,000		Debtors	40,000
Sundry creditors		40,000	Cash in hand	20,000
Profit and loss A/c		50,000
		3,00,00		3,00,000

Manju retired from the partnership firm on 31.03.2018 subject to the following adjustments:

1. Stock to be depreciated by ₹ 10,000
2. Provision for doubtful debts to be created for ₹ 3,000.
3. Buildings to be appreciated by ₹ 28,000

Prepare revaluation account and capital accounts of partners after retirement.

Answer 1

Dr.	Revaluation Account			Cr.
Particulars		₹	Particulars	₹
To Stock A/c		10,000	By Buildings A/c	28,000
To Provision for doubtful debts A/c		3,000
By Profit on Revaluation transferred to
Manju	7,500	15,000
Charu	4,500
Lavanya	3,000
		28,000		28,000

 

Dr.	Capital Account						Cr.
Particulars	Manju ₹	Charu ₹	Lavanya ₹	Particulars	Manju ₹	Charu ₹	Lavanya ₹
To Manju's loan A/c  (bal.fig)	1,02,500			By Balance b/d	70,000	70,000	70,000
To balance c/d		89,500	83,000	By Profit and loss A/c	25,000	15,000	10,000
				By Revaluation A/c	7,500	4,500	3,000
	1,02,500	89,500	83,000		1,02,500	89,500	83,000