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.