Radha, Sheela and Meena Were in Partnership Sharing Profits and Losses in the Proportion of 3:2:1 On April 1, 2017, Sheela retires from the Firm On that date, their Balance Sheet was as Follows | Bzziii.com

Radha, Sheela and Meena were in partnership sharing profits and losses in the proportion of 3:2:1. On April 1, 2017, Sheela retires from the firm. On that date, their Balance Sheet was as follows:

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Trade Creditors	3,000	Cash-in-Hand	1,500
Bills Payable	4,500	Cash at Bank	7,500
Expenses Owing	4,500	Debtors	15,000
General Reserve	13,500	Stock	12,000
Capitals:	45,000	Factory Premises	22,500
Radha 15,000		Machinery	8,000
Sheela 15,000		Losse Tools	4,000
Meena 15,000	45,000
	70,500		70,500

The terms were:

a) Goodwill of the firm was valued at Rs 13,500.
b) Expenses owing to be brought down to Rs 3,750.
c) Machinery and Loose Tools are to be valued at 10% less than their book value.
d) Factory premises are to be revalued at Rs 24,300.

Prepare:
1. Revaluation account
2. Partner’s capital accounts and
3. Balance sheet of the firm after retirement of Sheela.

Books of Radha,Sheela and Meena

Revaluation account

Particulars		Amount (Rs.)	Particulars	Amount (Rs.)
To Machinery		800	By Expense owing	750
To Loose Tools		400	By Factory premise	1,800
To Profit transferred to:
Meena’s Capital A/c	675
Radha’s Capital A/c	450
Sheela’s Capital A/c	225	1,350
		2,250		2,250

Partner’s Capital A/c

Particulars	Radha	Sheela	Meena	Particulars	Radha	Sheela	Meena
To Sheela’s Capital A/c	3,375		1,125	By balance b/d	15,000	15,000	15,000
To Sheela’s loan A/c		24,450		By Reserve	6,750	4,500	2,250
To balance c/d	19,050		16,350	By Revaluation A/c	675	450	225
				By Radha’s Capital A/c		3,375
				By Meena’s Capital A/c		1,125
	22,425	24,450	17,475		22,425	24,450	17,475

Balance Sheet

as on April 01,2017

Liabilities		Amount (Rs.)	Assets		Amount (Rs.)
To Bills Payable	4,500		By Cash at Bank		7,500
To Expense owing	3,750		By Cash in hand		1,500
To Trade Creditors	3,000		By Debtors		15,000
To Sheela’s loan	24,450		By stock		12,000
			By Machinery	8,000
			Less: 10%(revaluation)	800	7,200
To Partner’s Capital			By Factory premisses		24,300
Radha	19,050		By lose tools	4,000
Meena	16,350	35,400	Less: 10%	400	3,600
		71,100			71,100

WN.1.

(i) General reserve is to be written off among all partners in old profit sharing ratio.

(ii) Sheela’s share of goodwill = 13,000×2/6

= Rs. 4,333

(iii) Gaining ratio of remaining partner’s

Calculations for Radha’s gain

= `3/3`-`3/6` = `"18 - 12"/"24"` = `6/24`

Calculations for Meena’s gain

= `1/4`-`1/6` = `"6 - 4"/"24"` = `2/6`

(iv) Contribution for goodwill of retiring partner by remaining partners

Radha 

= 4,333×`3/4`

= Rs. 3,250

Meena 

= 4,333×`1/4`

= Rs. 1,083

5 6 7 8 9 10