L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3. On 31st March 2023, their Balance Sheet was as follows: Liabilities Amount (₹) Assets Amount (₹) Creditors 80,000 Land and Building 5,00,000 Bank overdraft 22,000 Machinery 2,50,000 Long term debts 2,00,000 Furniture 3,50,000 Capital A/cs: Investments 1,00,000 L 6,25,000 Stock 4,00,000 M 4,00,000 Debtors 2,00,000 N 5,25,000 15,50,000 Bank 20,000 Employees provident fund 38,000 Deferred Advertisement Expenditure 70,000 18,90,000 18,90,000 On 31st March 2023, M retired from the firm and remaining partners decided to carry on business. It was decided to revalue assets and liabilities as under: Land and Building be appreciated by ₹ 2,40,000 and Machinery be depreciated 10%. 50% of investments were taken by the retiring partner at book value. Provision for doubtful debts was to be made at 5% on debtors. Stock will be valued at market price which is ₹ 1,00,000 less than the book value. Goodwill of the firm be valued at ₹ 5,60,000. L and N decided to share future profits and losses in the ratio of 2 : 3. The total capital of the new firm will be ₹ 32,00,000 which will be in proportion of profit-sharing ratio of L and N. Gain on revaluation account amounted to ₹ 1,05,000. Prepare Partner’s Capital accounts and Balance sheet of firm after M’s retirement.

Partner’s Capital A/c Particulars L M N Particulars L M N To Def. Rev. Exp. A/c 20,000 20,000 30,000 By Balance b/d 6,25,000 4,00,000 5,25,000 To Investments A/c - 50,000 - By Revaluation A/c - Profit 30,000 30,000 45,000 To M’s Capital A/c 64,000 - 96,000 By L’s Capital A/c - 64,000 - To M’s Loan A/c - 5,20,000 - By N’s Capital A/c - 96,000 - To Balance c/d 12,80,000 - 19,20,000 By Bank A/c 7,09,000 - 14,76,000 13,64,000 5,90,000 20,46,000 13,64,000 5,90,000 20,46,000 Balance Sheet of Reconstituted Firm as at March 31, 2023 Liabilities Amount (₹) Amount (₹) Assets Amount (₹) Amount (₹) Creditors 80,000 Land and Building 7,40,000 Bank overdraft 22,000 Machinery 2,25,000 Long term debts 2,00,000 Furniture 3,50,000 Capital A/Cs: 32,00,000 Investments 50,000 L 12,80,000 Stock 3,00,000 M 19,20,000 Debtors 2,00,000 1,90,000 Employees provident fund 38,000 Less: Provision for doubtful debts (10,000) M’s Loan A/c 5,20,000 Bank 22,05,000 40,60,000 40,60,000

L, M and N were partners in a firm sharing profit and losses in the ratio of 2:2:3. On 31st March 2023, their Balance Sheet was as follows: - Accountancy

प्रश्न

L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3. On 31^st March 2023, their Balance Sheet was as follows:

Liabilities		Amount (₹)	Assets	Amount (₹)
Creditors		80,000	Land and Building	5,00,000
Bank overdraft		22,000	Machinery	2,50,000
Long term debts		2,00,000	Furniture	3,50,000
Capital A/cs:			Investments	1,00,000
L	6,25,000		Stock	4,00,000
M	4,00,000		Debtors	2,00,000
N	5,25,000	15,50,000	Bank	20,000
Employees provident fund		38,000	Deferred Advertisement Expenditure	70,000
		18,90,000		18,90,000

On 31^st March 2023, M retired from the firm and remaining partners decided to carry on business. It was decided to revalue assets and liabilities as under:

Land and Building be appreciated by ₹ 2,40,000 and Machinery be depreciated 10%.
50% of investments were taken by the retiring partner at book value.
Provision for doubtful debts was to be made at 5% on debtors.
Stock will be valued at market price which is ₹ 1,00,000 less than the book value.
Goodwill of the firm be valued at ₹ 5,60,000. L and N decided to share future profits and losses in the ratio of 2 : 3.
The total capital of the new firm will be ₹ 32,00,000 which will be in proportion of profit-sharing ratio of L and N.
Gain on revaluation account amounted to ₹ 1,05,000.

Prepare Partner’s Capital accounts and Balance sheet of firm after M’s retirement.

खातेवही

उत्तर

Partner’s Capital A/c
Particulars	L	M	N	Particulars	L	M	N
To Def. Rev. Exp. A/c	20,000	20,000	30,000	By Balance b/d	6,25,000	4,00,000	5,25,000
To Investments A/c	-	50,000	-	By Revaluation A/c - Profit	30,000	30,000	45,000
To M’s Capital A/c	64,000	-	96,000	By L’s Capital A/c	-	64,000	-
To M’s Loan A/c	-	5,20,000	-	By N’s Capital A/c	-	96,000	-
To Balance c/d	12,80,000	-	19,20,000	By Bank A/c	7,09,000	-	14,76,000
	13,64,000	5,90,000	20,46,000		13,64,000	5,90,000	20,46,000

Balance Sheet of Reconstituted Firm as at March 31, 2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Creditors		80,000	Land and Building		7,40,000
Bank overdraft		22,000	Machinery		2,25,000
Long term debts		2,00,000	Furniture		3,50,000
Capital A/Cs:		32,00,000	Investments		50,000
L	12,80,000		Stock		3,00,000
M	19,20,000		Debtors	2,00,000	1,90,000
Employees provident fund		38,000	Less: Provision for doubtful debts	(10,000)	1,90,000
M’s Loan A/c		5,20,000	Bank		22,05,000
		40,60,000			40,60,000