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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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
2,000
250
Cash in hand
27,000
18,000
Bills Payable
Cash at bank
General Reserve
12,000
Debtors
20,000
Profit and Loss A/c
6,000
Stock
11,800
50,000
Capital Accounts :
Buildings
Machinery
40,000
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.

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