Question

Sundry Creditors
Provision for Doubtful Debts
Capitals
Fs Current Alc (Dr.)
12,310; Balance Sheet Total 24,05,880.)
0. 107. A, B and C are partners sharing profits and losses in the ratio of 5:3:2.
Their Balance Sheet as at 31st March, 2018 was as follows:
Liabilities
Assets
29,000 Goodwill
24,000
5,000 Debtors
80,000
Investments
30,000
A
1.40,000
Land & Building
1,42,000
90,000
Machinery
50,000
76,000 3,06,000 Patents
4,000
Cash at Bank
10.000
3,40,000
340,000
C retired on 1st April, 2018 as per the following conditions:
(1) Goodwill of the firm is to be valued at three years purchase of the average
profits of the last five years which were 320,000; 312,000; 330,000; 76,000
Coss) and 34,000 respectively.
(ii) Machinery is to be reduced to 340,000 and patents are valueless.
(ii) There is no need of any provision for doubtful debts.
(iv) An unclaimed liability of 32,000 is to be written off.
(v) Out of the total insurance premium paid, 31,000 be treated as pre-paid.
(vi) Investments are revalued at $16,000 and these are taken by C at this value.
Entire sur payable to C is to be brought in by A and B in such a way so as to make
their capitals proportionate to their new profit sharing ratio which is 2:1.​

Answer 1

Answer:

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