On 31" March, 2015 the Balance Sheet of M/s. A, B and C sharing profits and losses in proportion to their capital, stood as follows: Assets Land and Buildings Machinery |Closing Stock |Sundry Debtors Cash and Bank Balances 1,00,000 Liabilities Capital Accounts 2,00,000 3,00,000 1,00,000 1,00,000 |2,00,000 3,00,000 A B 2,00,000 7,00,000 1,00,000 8,00,000 Sundry Creditors 8,00,000 On 31st March, 2015, A desired to retire from the firm and the remaining partners decided to carry on. It was agreed to revalue the assets and liabilities on that date on the following basis. (1) Land and Buildings be appreciated by 30%. (2) Machinery be depreciated by 20%. (3) Closing stock to be valued at $ 75,000. (4) Provision for bad debts be made at 5%. (5) Old credit balances of Sundry Creditors 20,000 be written back. (6) Joint Life Policy of the partners surrendered and cash obtained $ 80,000. (7) Goodwill of the entire firm be valued at $ 1,40,000 and A's share of the Goodwill be adjusted in the accounts of B and C who share the future profits equally. No Goodwill Account being raised. (8) The total capital of the firm is to be the same as before retirement. Individual capitals be in their profit sharing ratio. (9) Amount due to A is to be settled 50% on retirement and the balance 50% within one year. Prepare Revaluation Account and Capital Accounts of Partners.
On 31" March, 2015 the Balance Sheet of M/s. A, B and C sharing profits and losses in proportion to their capital, stood as follows: Assets Land and Buildings Machinery |Closing Stock |Sundry Debtors Cash and Bank Balances 1,00,000 Liabilities Capital Accounts 2,00,000 3,00,000 1,00,000 1,00,000 |2,00,000 3,00,000 A B 2,00,000 7,00,000 1,00,000 8,00,000 Sundry Creditors 8,00,000 On 31st March, 2015, A desired to retire from the firm and the remaining partners decided to carry on. It was agreed to revalue the assets and liabilities on that date on the following basis. (1) Land and Buildings be appreciated by 30%. (2) Machinery be depreciated by 20%. (3) Closing stock to be valued at $ 75,000. (4) Provision for bad debts be made at 5%. (5) Old credit balances of Sundry Creditors 20,000 be written back. (6) Joint Life Policy of the partners surrendered and cash obtained $ 80,000. (7) Goodwill of the entire firm be valued at $ 1,40,000 and A's share of the Goodwill be adjusted in the accounts of B and C who share the future profits equally. No Goodwill Account being raised. (8) The total capital of the firm is to be the same as before retirement. Individual capitals be in their profit sharing ratio. (9) Amount due to A is to be settled 50% on retirement and the balance 50% within one year. Prepare Revaluation Account and Capital Accounts of Partners.
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter2: Analyzing Transactions Into Debit And Credit Parts
Section: Chapter Questions
Problem 1ANFS
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Transcribed Image Text:On 31* March, 2015 the Balance Sheet of M/s. A, B and C sharing profits and losses in proportion to
their capital, stood as follows:
Liabilities
Assets
Land and Buildings
Machinery
|Closing Stock
Sundry Debtors
Cash and Bank Balances 1,00,000
Capital Accounts
2.00.000
A
2,00,000
3,00,000
3,00,000
2,00,000
1,00,000
1,00,000
B
7,00,000
1,00,000
Sundry Creditors
8,00,000
8,00,000
On 31st March, 2015, A desired to retire from the firm and the remaining partners decided to carry on.
It was agreed to revalue the assets and liabilities on that date on the following basis.
(1) Land and Buildings be appreciated by 30%. (2) Machinery be depreciated by 20%. (3) Closing
stock to be valued at $ 75,000. (4) Provision for bad debts be made at 5%. (5) Old credit
balances of Sundry Creditors 20,000 be written back. (6) Joint Life Policy of the partners
surrendered and cash obtained $ 80,000. (7) Goodwill of the entire firm be valued at $
1,40,000 and A's share of the Goodwill be adjusted in the accounts of B and C who share the
future profits equally. No Goodwill Account being raised. (8) The total capital of the firm is to
be the same as before retirement. Individual capitals be in their profit sharing ratio. (9)
Amount due to A is to be settled 50% on retirement and the balance 50% within one year.
Prepare Revaluation Account and Capital Accounts of Partners.
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