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Harish. Parcsh and Mahesh were three partners sharing profits and losses in the ratio of 5:4:1. Paresh retired on 31st March, 2017. His capital as on 1st April. 2016 was Rs 80.000. During the year 2016-17. he made drawings of Rs 5,000. He was to be charged interest on drawings of Rs 100.

The partnership deed provides that on the retirement of a partner, he will be entitled to : 

(i) His share of capital. 

(ii) Interest on capital @ 10% per annum. 

(iii) His share of profit in the year of retirement. 

(iv) His share of goodwill of the firm. 

(v) His share in the profit/loss on revaluation of assets and liabilities.

Additional Information: 

(a) Paresh’s share in the profits of the firm for the year 2016-17 was RS 20.000. 

(b) Goodwill of the firm was valued at Rs 24,000. 

(c) The firm suffered a loss of Rs 12,000 on the revaluation of assets and liabilities. 

(d) It was decided to transfer the amount due to Paresh to his loan account bearing interest @ 6% per annum.

The loan was to be repaid in two equal annual installments, the first installment to be paid on 31st March. 2018. 

You are required to prepare : 

(i) Paresh’s Capital Account. 

(ii) Paresh’s Loan Account till it is finally closed.

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                                             Paresh's Capital A/c

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