Question

Rupal, Shanu and Trisha were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 1. Their Balance Sheet as at 31^st March, 2024 was as follows:

Balance Sheet of Rupal, Shanu and Trisha as at 31st March, 2024
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capitals:		16,00,000	Fixed Assets	8,20,000
Rupal	8,00,000		Stock	2,80,000
Shanu	6,00,000		Debtors	5,00,000
Trisha	2,00,000		Cash	7,20,000
General Reserve		3,20,000
Creditors		4,00,000
		23,20,000		23,20,000

Trisha retired from the firm on 1^st April, 2024 on the following terms:

1. Trisha’s share of profit was entirely taken by Shanu.
2. Fixed assets were found to be undervalued by ₹ 2,40,000.
3. Stock was revalued at ₹ 2,00,000.
4. Goodwill of the firm was valued at ₹ 8,00,000 on Trisha’s retirement.
5. The total capital of the new firm was fixed at ₹ 16,00,000 which was adjusted according to the new profit sharing ratio of the partners. For this necessary cash was paid off or brought in by the partners as the case may be.

Prepare Revaluation Account and Partners’ Capital Accounts.

Answer 1

Dr.	Revaluation Account			Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)
To Stock A/с		80,000	By Fixed Assets A/c	2,40,000
To Profit on Revaluation:		1,60,000
Rupal’s Capital	80,000
Shanu’s Capital	60,000
Trisha’s Capital	20,000
		2,40,000		2,40,000

 

Dr.	Partner’s Capital Accounts						Cr.
Particulars	Rupal	Shanu	Trisha	Particulars	Rupal	Shanu	Trisha
To Trisha’s Capital A/c	-	1,00,000	-	By Balance b/d	8,00,000	6,00,000	2,00,000
To Trisha’s Loan A/c	-	-	3,60,000	By Revaluation A/c	80,000	60,000	20,000
To Cash A/c	2,40,000	-	-	By General Reserve А/c	1,60,000	1,20,000	40,000
To Balance c/d	8,00,000	8,00,000	-	By Shanu’s Capital A/c	-	-	1,00,000
				By Cash A/c	-	1,20,000	-
	10,40,000	9,00,000	3,60,000		10,40,000	9,00,000	3,60,000

Working Notes:

1. New Capital of Remaining Partners

Rupal = ₹ 16,00,000 × `1/2` = ₹ 8,00,000

Shanu = ₹ 16,00,000 × `1/2` = ₹ 8,00,000

2. New Ratio:

Rupal = `4/8`

Shanu = `3/8+1/8=4/8`

New Ratio = 1 : 1

3. Calculation of Cash (brought in or paid off):

Rupal = ₹ 8,00,000 (New Capital) – ₹ 10,40,000 (Adjusted Capital)

= ₹ (2,40,000) paid off or withdrawn

Shanu = ₹ 8,00,000 (New Capital) – ₹ 6,80,000 (Adjusted Capital)

= ₹ 1,20,000 brought in