. A, B and C are partners sharing profits in 4 : 3 : 3. Their Balance Sheet as at 31st March 2018 was as follows:
Liabilities Rs. Assets Rs.
Sundry Creditors
General Reserve
A's Capital Accounts :
B's Capiatal Accounts
C's Capital Accounts 1,20,000
40,000
4,00,000
2,00,000
2,00,000 Land and Building
Stock
Debtors : 1,50,000
Less : Provision for
Doubtful Debts 30,000
Cash at Bank 5,00,000
2,40,000
1,20,000
1,00,000
9,60,000 9,60,000
C retires on 1st April, 2018 and A and B decide to share future profits in the ratio of 6 : 4. It is agreed that :
(i) Goodwill of the firm is valued at Rs. 80,000
(ii) Land & Building is undervalued by Rs. 1,00,000 and Stock is overvalued by 20%.
(iii) Provision for Doubtful Debts is to be decreased to Rs. 10,000.
(iv) Computer valued Rs. 30,000 was unrecorded in the books.
It was decided to pay off C by giving him this computer and the balance in annual instalments of Rs. 1,00,000 together with interest @ 10% p.a.
You are required to prepare :
(a) Revaluation Account,
(b) C's Capital Account, and
(c) C's Loan Account till it is finally closed.
