11. Prem, Kumar and Arti were partners in a firm sharing profits in the ratio of 5:3:2 respectively. On 31 March 2020, their balance sheet was as follows: Balance Sheet as at 31 st March 2020 Liabilities (2) Assets (2) Capitals: 25,000 Building Plant & Machinery 15,000 10,000 10,000 5,000 25,000 Prem 30,000 20,000 20,000 8,000 2,000 10,000 Kumar Investment Arti Debtors General Reserve Stock Investment Fluctuation Reserve Cash Sundry Creditors 90,000 90.000 On this date, Kumar retired. The terms of retirement were: (a) Kumar sold his share of goodwill to Prem for 8,000 and to Arti for 4,000. (b) Stock was found to be undervalued by 1,000 and building by 7,000. c) Investments were sold for 11,000. d) There was an unrecorded creditor of 7,000. e) An amount of 30,000 was paid to Kumar in cash. The balance amount of Kumar was settled by accept a bill of exchange in favour of Kumar. repare Revaluation Account, partners' capital account and the balance sheet of the reconstituted firm.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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