Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2019, Naresh retired on that date, Balance Sheet of the firm was as follows:  

( Rs.)
( Rs.)
General Reserve12,000Bank7,600
Sundry Creditors15,000Debtors6,000
Bills Payable12,000Less: Provision for Doubtful Debts -(400)5,600
Outstanding Salary2,200Stock 9,000
Provision for Legal Damages6,000Furniture 41,000
Capital A/c :Premises 80,000
 1,43,200 1,43,200

Additional Information:
(a) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for  Rs. 1,200 and furniture to be brought up to Rs. 45,000. 
(b) Goodwill of the firm be valued at Rs. 42,000.
(c) Rs. 26,000 from Naresh’s Capital Account be transferred to his Loan Account and balance be paid through bank: if required, necessary loan may be obtained from bank.
(d) New profit-sharing ratio of Pankaj and Saurabh is decided to be 5: 1.
Give the necessary Ledger Accounts and Balance Sheet of the firm after Naresh’s retirement.


Leave a Reply