A and B are partners sharing profits in the ratio of 4 3 Their Balance Sheet as at 31st March 2019 s......

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Accountancy ( 12th) Dissolution of Partnership Firm Add to Study Deck

A and B are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2019 stood as:

Liabilities	Amount	Assets	Amount
Sundry Creditors	28,000	Cash	20,000
Reserve	42,000	Sundry Debtors	1,20,000
Capital A/cs:		Stock	1,40,000
A 2,40,000		Fixed Assets	1,50,000
B 1,20,000	3,60,000
	4,30,000		4,30,000

They decided that with effect from 1st April, 2019, they will share profits and losses in the ratio of 2 : 1. For this purpose they decided that:

Fixed Assets are to be reduced by 10%.

A Provision for Doubtful Debts of 6% be made on Sundry Debtors.

iii

Stock be valued at 1,90,000.

An amount of 3,700 included in Creditors is not likely to be claimed .

Partners decided to record the revised values in the books. However, they do not want to disturb the Reserve. You are required to pass Journal entries, prepare Capital Accounts of Partners and the revised Balance Sheet.

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By: Aman

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