Question

1. Ashok Bhaskar and Chamon are partners in a fum, sharing Dofts idiomesss Ashok 1/3, thakar 1/2
Charrian 176 respectively. The Balance sheet of the most March, 2020 was
Chapter Hettement of a Partner 0.59
Amers
300,000
4,00,000
2,50.000
General Reserve
Sudry Creditors
loan l'ayable
Building
Plant and Machinery
Furniture
9.50.000 Stock
2,20,000 Debtors
2,50.000 Les Provision for Doubt Debts
1,90,000 Cash in Hand
Advertisement Suspense Account
15,70.000
500.000
400.000
100.000
2.50.000
110,000
5.000
1,75.000
85.000
60,000
15,70,000
Chaman retired on 1st April, 2020 subject to the following adjustments
w Goodwill of the firm be valued at 210,000. Chamaris share of goodwill be adjusted into the Capital
Accounts of Ashok and Bhaskar who will share future profits in the ratio of 3 2
(Plant and Machinery to be reduced by 10% and Furniture by 9%,
(O Stock to be increased by 15% and Building by 10%
(d) Provision for Doubtful Debts to be raised to ? 20.000,
Pass Journal entries to record the above transactions in the books of the firm and show the Profit and
Loss Adjustment Account, Capital Account of Chaman and the Balance Sheet of the firm after Chaman's
retirement

Answer 1

We are required to prepare journal entries, the Profit and loss adjustment account, the Capital account of the partner Chaman, and the Balance sheet on the retirement of Chaman.

The journal entries that will be passed will be:

Plant and Machinery a/c    Dr. $40,000$

To Revaluation A/c                                                        $40,000$

(Being plant and machinery written down by $10$%)

Furniture a/c                   Dr. $5000$

To Revaluation a/c                                                         $5,000$

(Being furniture written down by $5$%)

Provision for Doubtful debts a/c Dr. $15,000$

To, Revaluation a/c                                                      $15,000$

(being provision raised to $20,000$

Revaluation a/c   Dr.           $37500$

To Stock a/c                                                                   $37500$

(Being stock increased by $15$%)

Revaluation a/c Dr.           $50,000$

To,  Building a/c                                                              $50,000$

(Being building increased by $10$%)

Profit and loss a/c Dr.          $27,500$                          

To Ashok a/c                                                                    $9,163$

To, Bhaskar a/c                                                                $13,750$

To, Chaman a/c                                                                 $4,583$  

(Being profit transferred to partners)                          

PROJECT CODE: #SPJ3