| Liabilities | Amount ( Rs.) | Assets | Amount ( Rs.) |
| Creditors | 30,000 | Cash in Hand | 18,000 |
| Bills Payable | 16,000 | Debtors – 25,000 | |
| General Reserve | 12,000 | Less: Provision for Doubtful Debts – (3,000) | 22,000 |
| Capital A/c : | Stock | 18,000 | |
| A – 40,000 | Furniture | 30,000 | |
| B – 40,000 | Machinery | 70,000 | |
| C – 30,000 | 1,10,000 | Goodwill | 10,000 |
| 1,68,000 | 1,68,000 |
B retires on 1st April, 2019 on the following terms:
(a) Provision for Doubtful Debts be raised by Rs. 1,000.
(b) Stock to be reduced by 10% and Furniture by 5%.
(c) There is an outstanding claim of damages of Rs. 1,100 and it is to be provided for.
(d) Creditors will be written back by Rs. 6,000.
(e) Goodwill of the firm is valued at Rs. 22,000.
(f) B is paid in full with the cash brought in by A and C in such a manner that their capitals are in proportion to their profit-sharing ratio and Cash in Hand remains at Rs. 10,000.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of A and C.
SOLUTION
