Question

P. Q and R were partners in a firm sharing profits in 4: 3: 3 ratios. Their Balance Sheet on
28.2.2006 was as follows:
Liabilities Amount Assets Amount
Creditors 75,000 Bank 20,000
P’s Capital 85,000 Debtors 46,000
Q’s Capital 50,000 Stock 60,000
R’s Capital 66,000 Building 1, 00,000
P & L Account 50,000
2,76,000 2,76,000
Q retired on the above date on the following terms:
i. Building was to be depreciated by Rs. 10,000.
ii. A provision of Rs. 2,000 for bad and doubtful debts was to be created on sundry debtors.
iii. Rent outstanding was Rs. 8,000.
iv. Goodwill of the firm was valued at Rs. 1,40,000.
v. Q was to be paid Rs. 15,000 in cash through bank and the balance was to be transferred to his
loan account.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of P and R
after Q’s retirement.

Answer 1

Answer:

Liabilities Amount Assets Amount Creditors 75,000 Bank 20,000. P's Capital 85,000 Debtors 46,000. Q's Capital 50,000 Stock 60,000