Q. 27 DK Goel Retirement of Partner Solutions Class 12 CBSE (2024-25)

Here are the solutions of Question number 27 of Retirement of Partner chapter 5 of DK Goel Class 12 CBSE (2024-25)

Q. 27. A, B and C were partners sharing profits and losses in the ratio of 5 : 3 : 2. Following was their Balance Sheet as at 31st March, 2023:

Liabilities	₹	Assets	₹
Sundry Creditors	1,20,000	Cash at Bank	34,000
Capital A/cs: A B C	4,00,000 2,50,000 1,50,000	Sundry Debtors 1,50,000 Less: Provision for Doubtful Debts 9,000	1,41,000
		Stock	1,45,000
		Plant	2,00,000
		Land and Building	4,00,000
	9,20,000		9,20,000

A retires on this date and the following adjustments were agreed upon:

(i) Bad Debts amounting to ₹ 10,000 were to be written off and provision for doubtful debts be maintained at existing rate.

(ii) An unrecorded creditor of ₹ 20,000 will be taken into account.

(iii) Provision is to be made for legal damages amounting to ₹ 25,000.

(iv) There is a liability for ₹ 15,000 for outstanding salaries.

(v) Sundry creditors be reduced by ₹ 8,000 being a liability not payable.

(vi) Stock be increased by ₹ 15,000 and Plant is to be reduced to ₹ 1,80,000.

Pass journal entries to give effect to above adjustments and prepare Revaluation Account.

[Ans. Loss on Revaluation ₹ 66,400.]

Solution:-