Question

Meghna, Mehak and Mandeep were partners in a firm whose Balance Sheet as on 31st March, 2023 was as under:

Balance Sheet
Liabilities		Amount	Assets	Amount
Creditors		28,000	Cash	27,000
General Reserve		7,500	Debtors	20,000
Capitals:		44,500	Stock	28,000
Meghna	20,000		Furniture	5,000
Mehak	14,500
Mandeep	10,000
		80,000		80,000

Mehak retired on this date under the following terms:

1. To reduce stock and furniture by 5% and 10% respectively.
2. To provide for doubtful debts at 10% on debtors.
3. Goodwill was valued at Rs. 12,000.
4. Creditors of Rs. 8,000 were settled at Rs. 7,100.
5. Mehak should be paid off and the entire sum payable to Mehak shall be brought in by Meghna and Mandeep in such a way that their capitals should be in their new profit-sharing ratio and a balance of Rs. 25,000 is maintained in the cash account.

Prepare Revaluation Account and partners’ capital accounts of the new firm.

Answer 1

Dr.	Revaluation A/c			Cr.
Particulars	Amount	Particulars		Amount
To Stock A/c	1,400	By Creditors A/c		900
To Furniture A/c	500	By Loss transferred to:		3,000
To Provision for doubtful debts	2,000	Meghna	1,000
		Mehak	1,000
		Mandeep	1,000
	3,900			3,900

 

Dr.	Partner Capital Account						Cr.
Particulars	Meghna	Mehak	Mandeep	Particulars	Meghna	Mehak	Mandeep
To Revaluation	1,000	1,000	1,000	By Balance b/d	20,000	14,500	10,000
To Mehak	2,000	-	2,000	By General Reserve	2,500	2,500	2,500
To Cash	-	20,000	-	By Meghna	-	2,000	-
To Balance c/d	27,050	-	27,050	By Mandeep	-	2,000	-
				By Cash	7,550	-	17,550
	30,050	21,000	30,050		30,050	21,000	30,050