T.S. Grewal Class 12 Chapter 5 Q.24 - Retirement of a Partner

Question 24

Sangeeta, Saroj and Shanti are partners sharing profits and losses in the ratio of 5 : 3 : 2. Shanti retired and, on the date of her retirement, the following adjustments were agreed upon: (a) Furniture to be increased by ₹12,000. (b) Stock to be decreased by ₹10,000. (c) Machinery of book value ₹50,000 to be depreciated by 10%. (d) A Provision for Doubtful Debts @ 5% to be created on debtors of ₹40,000. (e) Unrecorded Investment worth ₹10,000 to be recorded. (f) An item of ₹1,000 included in Bills Payable is no longer payable and is to be written back. Prepare the Revaluation Account.

Solution

REVALUATION ACCOUNT

Particulars	₹	Particulars	₹
To Stock A/c	10,000	By Furniture A/c	12,000
To Machinery A/c	5,000	By Investment A/c	10,000
To Provision for Doubtful Debts A/c	2,000	By Bills Payable A/c	1,000
To Profit transferred to:
Sangeeta’s Capital A/c 3,000
Saroj’s Capital A/c 1,800
Shanti’s Capital A/c 1,200	6,000
Total	23,000	Total	23,000

Revaluation profit ₹6,000 is shared by all partners in the old ratio 5 : 3 : 2.