Question

Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively. Their Balance Sheet as on 31^st March, 2012 was as follows:

Balance Sheet as on 31-03-2012

Sapna decided to retire on 1^st April 2012 on following terms:-

1) Goodwill of the firm will be valued at Rs 30,000/-

2) Furniture was taken over by Sanil for Rs 4,700/-

3) Make a provision for unpaid expenses Rs 1,700/-

4) Out of the amount due to Sapna Rs 7,500/- to be paid by cheque and the remaining amount to be transferred to her loan account.

Answer 1

Profit and Loss Adjustment Account

Partners’ Capital Accounts

Balance Sheet

as on April 01, 2012 after Sapna’s retirement

Note : As per the book the Total of Balance Sheet is Rs 2,12,200 but as per our solution it should be Rs 2,07,500.