Question

Mita, Sita and Rita are partners in a firm. Rita retires from the firm on 31st March, 2024. Her claim, including her capital and her share of goodwill, is determined at ₹ 2,50,000. On this date the firm’s books showed:

1. An unrecorded investment valued at ₹ 60,000 which was given to an unrecorded creditor of ₹ 1,16,000 in settlement of his claim of ₹ 70,000.
2. An unrecorded vehicle which was given to Rita at the market value of ₹ 46,000 in part settlement of her claim.

The balance of Rita’s claim was discharged by cheque.

You are required to pass journal entries to record the above transactions in the books of the firm on 31st March, 2024.

Answer 1

Journal Entries
Sr. No.	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Revaluation A/c   ...Dr.		46,000	-
	To Creditors A/c		-	46,000
	(Being creditors revalued and settled)
2.	Vehicle A/c   ...Dr.		46,000	-
	To Revaluation A/c		-	46,000
	(Being vehicle revalued)
3.	Rita’s Capital A/c   ...Dr.		2,50,000	-
	To Vehicle A/c		-	46,000
	To Bank A/c		-	2,04,000
	(Being Rita’s claim settled)