Gini, Bini and Mini were in partnership sharing profits and losses in the ratio of 5:2:2. Their Balance Sheet as at 31st March, 2021 was as follows:
On 31st March, 2021, Gini retired from the firm. All the partners agreed to revalue the assets and liabilities on the following basis: (i) Bad debts amounted to ₹ 5,000. A provision for doubtful debts was to be maintained at 10% on debtors. (ii) Partners have decided to write off existing goodwill. (iii)Goodwill of the firm was valued at ₹ 54,000 and be adjusted into the Capital Accounts of Bini and Mini, who will share profits in future in the ratio of 5:4. (iv)The assets and liabilities valued as: Inventories ₹1,30,000; Machinery ₹ 82,000; Furniture ₹1,95,000 and Building ₹ 6,00,000. (v) Liability of ₹23,000 is to be created on account of Claim for Workmen Compensation. (vi)There was an unrecorded investment in shares of ₹ 25,000. It was decided to pay off Gini by giving her unrecorded investment in full settlement of her part payment of ₹ 28,000 and remaining amount after two months. Prepare Revaluation Account and Partners’ Capital Accounts as on 31st March, 2021.
Answer.
