d losses in the ratio of 4: 3:2. Following is their balance sheet as on 31st December 2021. 10
Liabilities.
Amount rupees.
Assets.
Sundry creditors.
Profit and loss account.
71,000.
40,000.
Cash at bank.
Amount Rupees.
158,000.
Sundry debtors 320,000.
300,000.
Less. Provision for doubtful debts 20,000.
General reserve.
105,000.
Closing stock
140,000.
Workmen's
84,000.
Office equipment's
70,000.
Compensation Reserve.
Mr X Capital.
500,000.
Investments [Market value 100,000]
110,000.
Mr. Y Capital.
Mr Z Capital.
400,000.
Land and building.
600,000.
200,000.
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22,000.
14,00,000
Suspense account.
14,00,000
Mr Y retires on 1st January 2022, and Mr X and Mr Z decided to share future profits and losses in the ratio of 5: 3. It was agreed that:
1. A computer purchased on 1st April 2021 for ₹40,000 debited to office expenses account is to be brought into account charging depreciation at the rate of 10% per annum.
2. Accrued income of ₹1000 is to be provided for.
3. A sum of 15,000 rupees is to be written off from debtors.
4. Closing stock is to be written down to ₹120,000 and land and building is to be written up by ¥100,000.
5. General Reserve is to appear in the books at ₹60,000.
6. Since there was no claim against Workman Compensation Reserve, it was agreed that it should appear in the books at ₹30,000.
7. Balance of the Profit and Loss account and advertisement suspense account is to be carried forward in the new firm's balance sheet.
8. 20% of the amount payable to Mr Y was paid in cash and the balance was transferred to his loan account.
Prepare partners capital account and the balance sheet of the new firm.
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