Question

D, E and F were partners in a firm sharing profits in the ratio of 5 : 2 : 3. On 31.3.2022 their balance sheet was as follows:

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		53,000	Cash	16,000
Bills Payable		62,000	Bank	17,000
General Reserve		2,00,000	Stock	18,000
Capitals:			Debtors	1,99,000
D	7,00,000	18,00,000	Investments	1,15,000
E	5,00,000		Machinery	7,50,000
F	6,00,000		Land and Building	10,00,000
		21,15,000		21,15,000

On the above date D retired from the firm and the following was agreed upon:

1. Goodwill of the firm was valued at ₹ 1,00,000, D's share of goodwill was adjusted through the capital accounts of remaining partners.
2. Investments were to be brought to their market value which was ₹ 85,000.
3. Machinery was to be depreciated to ₹ 7,00,000.
4. Land and Building was to be appreciated to ₹ 12,00,000.
5. The balance in D's capital account was transferred to his loan account.

Prepare Revaluation Account and D's Capital Account on his retirement.

Answer 1

Dr.	In the Books of D, E and F Revaluation A/c			Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Investment A/c		30,000	By Land and Building	2,00,000
To Machinery A/c		50,000
To Partners' Capital A/c:
D	60,000
E	24,000
F	36,000	1,20,000
		2,00,000		2,00,000

 

Dr.	D's Capital A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To D's Loan A/c	9,10,000	By Balance b/d	7,00,000
		By General Reserve	1,00,000
		By Revaluation A/c	60,000
		By E's Capital A/c	20,000
		By F's Capital A/c	30,000
	9,10,000		9,10,000