Question

Anu, Bhanu and Charu were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Anu decided to retire from the firm on 31st March, 2021. The balance sheet of the firm on that date was as follows:

Balance sheet of Anu, Bhanu and Charu as on 31st March, 2021:
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Creditors		24,000	Bank		10,000
Profit & Loss A/c		5,000	Debtors	20,000	19,600
Capitals:			Less: Provision for Doubtful debts	400
Anu	31,000	83,000	Stock		27,000
Bhanu	30,000		Investments		10,000
Charu	22,000		Patents		2,400
			Premises		43,000
		1,12,000			1,12,000

On retirement of Anu, following terms were agreed upon:

1. Anu sold her share of premium for goodwill to Bhanu for ₹ 6,000 and to Charu for ₹ 3,000.
2. Provision for doubtful debts was to be raised to 5% on debtors.
3. Patents were considered valueless.
4. Anu was paid ₹ 9,600 through a cheque and balance was transferred to her Loan A/c.

Prepare Revaluation Account and Anu's Capital Account on her retirement.

Answer 1

Dr.	In the books of Anu, Bhanu and Charu Revaluation Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Provision for doubtful debts	600	By Partners Capital A/c
To Patents	2,400	Anu	1,200
		Bhanu	1,200
		Charu	600
	3,000		3,000

 

Dr.	Anu's Capital Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Revaluation A/c	1,200	By Balance b/d	31,000
To Bank A/c	9,600	By Profit & Loss A/c	2,000
To Anu's Loan A/c	31,200	By Bhanu's Capital A/c	6,000
		By Charu's Capital A/c	3,000
	42,000		42,000

Note: It is not mentioned in the question whether the amount of goodwill purchased by Bhanu and Charu of Anu is involved in the payment through a cheque of ₹ 9,600 or not. Therefore, it has been determined that 9,600 comprises the goodwill payment. The payment in question has not been made separately.