Angad, Kunal and Nitin were partners sharing profit and losses in the proportion of 2 : 2 : 1 respectively. The Balance Sheet of their firm as on 31st March, 2013, stood as follows :
Kunal retires on 1st April, 2013, subject to the following adjustments :
(a) Provision for bad and doubtful debts to be increased by Rs 975.
(b) Stock to be appreciated by 20% and Building by 10%.
(c) Machinery to be depreciated by 10% and Motor Van by 15%.
(d) Goodwill of the firm to be valued at Rs 9,000.
(e ) The capitals of the continuing partners are to be adjusted according to the new profit sharing ratio which is agreed between Angad and Nitin as 3 : 2 respectively.
(f) Excess or shortfall in Angad’s and Nitin’s Capital Accounts to be transferred to their respective Current Accounts.
You are required to prepare
(i) Revaluation Account.
(ii) Partners’Capital Accounts.
(iii) Balance Sheet of the reconstituted firm.