Question

The Balance Sheet of Apple, Banana and Orange who were sharing profit and losses in
the ratio 5 : 3 : 2 as at March 31, 2018 was as follows:
Liabilities ` Assets `
Creditors
Employees Provident Fund
Workmen Compensation Fund
Profit and Loss A/c
Capital Accounts:
Apple 40,000
Banana 62,000
Orange 33,000
50,000
10,000
50,000
85,000
1,35,000
Cash at bank
Sundry Debtors
Stock
Fixed Assets
Goodwill
40,000
1,00,000
80,000
60,000
50,000
3,30,000 3,30,000
Apple retired on the above date on the following terms:
(a) Goodwill of the firm is to be valued at ` 80,000 and Apple’s share of the same be
adjusted to that of Banana and Orange who will share the future profit and losses in the
ratio 2 : 3.
(b) Fixed Assets are to be depreciated to ` 57,500.
(c) Create a provision for doubtful debts @ 5 % on debtors.
(d) A claim for liability, included in creditors for ` 10,000 is settled at ` 8,000.
(e) The amount to be paid to Apple by Banana and Orange in such a way that their capitals
are proportionate to their profit sharing ratio after leaving a balance of ` 15,000 in the
Bank A/c. Apple decided to donate 50 % of his share to a school for differently
abled children. Prepare Revaluation A/c, Partners’ Capital Accounts and the Balance
Sheet of the new firm.

Answer 1

Revaluation A/C
particular. amt. particular. amt
fixed assets. 2500. creditors. 2000
provision. 5000