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Solution - Preparation of Revaluation Account and Balance Sheet

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Kushal Kumar and Kavita were partners in a firm sharing profit in the ratio 3:1:1. On 1st April ,2012 their Balance Sheet was as follows:

Balance Sheet of Kushal, Kumar and Kavita as on 1st April, 2012

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)

Creditors

Bill payable

General Reserve

Capital:

       Kushi                          3,00,000

       Kumar                        2,80,000

       Kavita                         3,00,000  

1,20,000

1,80,000

1,20,000

 

 

 

8,80,000

Cash

Debtors                              2,00,000

  Less: Provision                     10,000  

Stock

Furniture

Building

Land

70,000

 

1,90,000

2,20,000

1,20,000

3,00,000

4,00,000

 13,00,000 13,00,000

On the above date Kavita retired and the following was agreed:

i. Goodwill of the firm was valued at Rs.40,000.

ii. Land was to be appreciated by 30% and building was to be depreciated by Rs.1,00,000.

iii. Value of furniture was to be reduced by Rs.20,000.

iv. Bad debts reserve is to be increased to Rs.15,000.

v. 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.

vi. Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.

Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita's retirement.

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Solution for concept: Preparation of Revaluation Account and Balance Sheet. For the courses CBSE (Arts), CBSE (Commerce), CBSE (Science)
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