Question

Vimal, Sanjay and Rusha are partners in a firm sharing profits and losses in proportion to their

capital. Their Balance Sheet as at 31st March, 2017, is given below:

Liabilities Amount

()

Assets Amount

()

Sundry Creditors

Workmen Compensation Fund

Employees Provident Fund

Capital Accounts:

Vimal 40,000

Sanjay 30,000

Rusha 30,000

10,000

3,000

7,000

1,00,000

1,20,000

Cash at Bank

Sundry Debtors 22,000

Less Prov. for

Doubtful debts (2,000)

Stock

Plant & Machinery

Land & Building

Advertisement Expenditure

5,000

20,000

20,000

30,000

40,000

5,000

1,20,000

[12]

Sanjay retired on 1st April, 2017, on the following terms:

(a) Land & Building to be appreciated by 30%.

(b) Plant & Machinery to be depreciated to 70%.

(c) Bad debts 3,000 to be written off.

(d) The claim, on account of Workmen Compensation Fund, was estimated at 2,000.

(e) Sanjay to be paid 45,000 for which sufficient loan be taken from the bank.

(f) Vimal and Rusha, in the new firm, to share profits and losses in the ratio of 3:2.

(g) It was decided that the advertisement expenditure would be carried forward in the new firm`s

balance sheet.

You are required to:

(i) Pass journal entries on the date of Sanjay’s retirement.

(ii) Prepare the Opening Balance Sheet of the new firm on the completion of the transactions.​

Answer 1

Answer:

OK but what's the question?

Answer 2

Answer:

Explanation:

                             JOURNAL ENTRIES ON SANJAY RETIREMENT                

                     Particulars                  Amount (Dr.)                  Amount(Cr.)        

Land and building A/c                  12000

  To Revaluation A/c                                                                 12000

(land and building appreciated by 30 %)

Revaluation A/c                          10000

   To Plant & mach. A/c                                                             9000

   To  Provision for bad debts                                                   1000

(Plant And machinery provision for bad debts decreased)

Workmen Compensation Fund      3000

   To   workmen compensation claim                           2000

   To    Vimal  A/c                                                               400

    To    Rusha A/c                                                               300

    To    Sanjay A/c                                                              300

( workmen compensation  fund adjusted )

Vimal capital A/c                              9400

Rushas capital a/c                            4700

   To sanjay capital A/c                                            14100

( Goodwill paid by existing partner to retreiving patner)

Revaluation a/c                                  2000

  To Vimals A/c                                                               800

   To Sanjay A/c                                                              600

    To Rusha A/c                                                               600

(Profit on revaluation a/c to patners capital a/c )

                              REVALUATION ACCOUNT                                          

To plant & machinery A/c    9000      By land & building A/c      12000

To  Provision for bad debts   1000

To  Profit transfered

 Vimals A/c          800

 Sanjay A/c          600

 Rusha A/c           600          2000

                                                                                                                                       

                                             12000                                                      12000