Question

Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2019, Naresh retired on that date, Balance Sheet of the firm was as follows:
 

Liabilities		Amount (₹)	Assets		Amount (₹)
General Reserve		12,000	Bank		7,600
Sundry Creditors		15,000	Debtors	6,000
Bills Payable		12,000	Less: Provision for Doubtful Debts	400	5,600
Outstanding Salary		2,200	Stock		9,000
Provision for Legal Damages		6,000	Furniture		41,000
Capital A/cs:			Premises		80,000
Pankaj	46,000
Naresh	30,000
Saurabh	20,000	96,000
		1,43,200			1,43,200

 
Additional Information:
(a) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for ₹ 1,200 and furniture to be brought up to ₹ 45,000. 
(b) Goodwill of the firm be valued at ₹ 42,000.
(c) ₹ 26,000 from Naresh's Capital Account be transferred to his Loan Account and balance be paid through bank: if required, necessary loan may be obtained from bank.
(d) New profit-sharing ratio of Pankaj and Saurabh is decided to be 5 : 1.
Give the necessary Ledger Accounts and Balance Sheet of the firm after Naresh's retirement.

Answer 1

Revaluation Account

Dr.	Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Stock			900	Premises	16,000
Provision for Legal Damages			1,200	Provision for Doubtful Debts	100
Revaluation Profit				Furniture	4,000
Pankaj’s Capital A/c		9,000
Naresh’s Capital A/c		6,000
Saurabh’s Capital A/c		3,000	18,000
			20,100		20,100

 

Partners’ Capital Accounts

Dr.					Cr.
Particulars	Pankaj	Naresh	Saurabh	Particulars		Pankaj	Naresh	Saurabh
Naresh’s Capital A/c	14,000			Balance b/d		46,000	30,000	20,000
Naresh’s Loan A/c		26,000		General Reserve		6,000	4,000	2,000
Bank		28,000		Revaluation (Profit)		9,000	6,000	3,000
Balance c/d	47,000		25,000	Pankaj’s Capital A/c			14,000
	61,000	54,000	25,000			61,000	54,000	25,000

 

Bank Account

Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	7,600	Naresh’s Capital A/c	28,000
Bank Loan (Balancing Figure)	20,400
	28,000		28,000

 

Balance Sheet

as on March 31, 2019

Liabilities		Amount (₹)	Assets		Amount (₹)
Sundry Creditors		15,000	Debtors	6,000
Bills Payable		12,000	Less: Provision for Doubtful Debts	300	5,700
Bank Loan		20,400	Stock		8,100
Outstanding Salaries		2,200	Furniture		45,000
Provision for Legal Damages		7,200	Premises		96,000
Naresh’s Loan		26,000
Capitals:
Pankaj	47,000
Saurabh	25,000	72,000
		1,54,800			1,54,800