Question

so. Leena Madan and Naresh were partners in a hirm sharing profits and losses in the ratio of 2:2:1
On 31st March, 2015, their Balance Sheet was as follows:
BALANCE SHEET as at 31st March, 2015
Liabilities
Assets
Trade Creditors
Bank Overdraft
Long term Debts
Employees Provident Fund
Capitals: Leena
Madan
Naresh
1,60,000
44.000
4,00,000
76,000
12,50.000
8,00.000
10,50.000
Land and Building
Machinery
Furniture
Investments
Closing Stock
Sundry Debtors
Bank
Deferred Advertisement Expenditure
10,00,000
5,00,000
700,000
2,00,000
8,00,000
4,00,000
80,000
1,00,000
37,80,000
31,00,000
37,80,000
On 31st March, 2015. Madan retired from the firm and the remaining partners decided to carry on the
business. It was decided to revalue assets and liabilities as under:
(1) Land and Building be appreciated by 2,40,000 and Machinery be depreciated by 10%.
(11) 50% of Investments were taken over by the retiring partner at book value.
(i) An old customer Mohit whose account was written off as bad debt had promised to pay 7,000 in
settlement of his full debt of 10,000.
(iv) Provision for Doubtful Debts was to be made at 5% on debtors.
(v) Closing Stock will be valued at market price which is 1,00,000 less than the book value.
(vi) Goodwill of the firm be valued at 5,60,000 and Madan's share of goodwill be adjusted in the
accounts of Leena and Naresh. Leena and Naresh decided to share future profits and losses in the
ratio of 3:2.
(vii) The total capital of the new firm will be 32,00,000 which will be in the proportion of the profit-
sharing ratio of Leena and Naresh.
(viii) Amount due to Madan was settled by accepting a Bill of Exchange in his favour payable after 4 months.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the firm after Madan's
retirement
(AI 2016)​

Answer 1

Answer:

so. Leena Madan and Naresh were partners in a hirm sharing profits and losses in the ratio of 2:2:1

On 31st March, 2015, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2015

Liabilities

Assets

Trade Creditors

Bank Overdraft

Long term Debts

Employees Provident Fund

Capitals: Leena

Madan

Naresh

1,60,000

44.000

4,00,000

76,000

12,50.000

8,00.000