P 5/10, Q 2/10 and R 3/10.
Balance Sheet as on 31st March, 2010
Liabilities (`) Assets (`)
Creditors 10,400 Cash at hand 1,400
General reserve 24,000 Goodwill 4,200
Capital A/c’s: Debtors 13,800
P 30,000 Less: R.D.D. (800) 13,000
Q 22,000 Stock 27,400
R 23,600 Plant and Machinery 30,000
Factory Building 34,000
1,10,000 1,10,000
Q retires from the business on 1st April, 2010 on the following terms:
a. The assets are revalued as under:
1. Stock at ` 25,000.
2. Factory Building is appreciated by 15%.
3. Reserve for bad and doubtful debts is to be increased upto ` 1,100.
4. Plant and Machinery depreciated by 5%.
b. The goodwill of the firm is valued at ` 20,000, which is to be written off. The remaining
partners decided new profit sharing ratio which will be 3 : 2.
c. Q be paid ` 840 in cash on his retirement and the balance is to be transferred to his
loan account.
Pass necessary journal entries to give the above effect.
Written on March 27, 2021, 7:47 a.m.