P, Q and R were in partnership sharing profits and losses in the proportion of 3: 2:1. Their Balance Sheet as at 31.3.2015 was as under BALANCE SHEET as at 31.3.2015 Liabilities $ Assets $ Creditors 27,000 18,000 Cash in hand Cash at bank 2,000 250 Bills Payable General Reserve 12,000 Debtors 20,000 Profit and Loss A/c 6,000 Stock Capital Accounts : 11,800 50,000 Buildings 40,000 Machinery 24,000 Q 20,000 Loose Tools 5,750 R 10,000 70,000 Furniture 8,200 Patents 2,000 Goodwill 9,000 1,33,000 1,33,000 On the same date, Q was retired and the following terms were agreed upon: (i) Goodwill for the firm is valued at $ 12,000. (ii) Machinery and Loose tools are to be valued at 20% less than their book value. (iii) The Buildings be decreased to $40,000. (iv) Furniture to be appreciated by 15%, and Creditors to be reduced by $ 620 (v) $ 1,300 to be paid to Q immediately and the balance to be transferred to his loan account, carrying interest at 6% per annum. You are required to prepare Revaluation Account, the Capital Accounts of the Partners and the Balance Sheet of the firm as at 31.3.2015.
P, Q and R were in partnership sharing profits and losses in the proportion of 3: 2:1. Their Balance Sheet as at 31.3.2015 was as under BALANCE SHEET as at 31.3.2015 Liabilities $ Assets $ Creditors 27,000 18,000 Cash in hand Cash at bank 2,000 250 Bills Payable General Reserve 12,000 Debtors 20,000 Profit and Loss A/c 6,000 Stock Capital Accounts : 11,800 50,000 Buildings 40,000 Machinery 24,000 Q 20,000 Loose Tools 5,750 R 10,000 70,000 Furniture 8,200 Patents 2,000 Goodwill 9,000 1,33,000 1,33,000 On the same date, Q was retired and the following terms were agreed upon: (i) Goodwill for the firm is valued at $ 12,000. (ii) Machinery and Loose tools are to be valued at 20% less than their book value. (iii) The Buildings be decreased to $40,000. (iv) Furniture to be appreciated by 15%, and Creditors to be reduced by $ 620 (v) $ 1,300 to be paid to Q immediately and the balance to be transferred to his loan account, carrying interest at 6% per annum. You are required to prepare Revaluation Account, the Capital Accounts of the Partners and the Balance Sheet of the firm as at 31.3.2015.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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