Kanika, Disha and Kabir were partners sharing profits in the ratio of 2 : 1 : 1. On 31st March, 2016, their Balance Sheet was as under:
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Trade creditors
|
53,000
|
Bank
|
60,000
|
|
Employees' Provident Fund
|
47,000
|
Debtors
|
60,000
|
|
Kanika's Capital
|
2,00,000
|
Stock
|
1,00,000
|
|
Disha's Capital
|
1,00,000
|
Fixed assets
|
2,40,000
|
|
Kabir's Capital
|
80,000
|
Profit and Loss A/c
|
20,000
|
|
|
4,80,000
|
|
4,80,000
|
|
|
|
|
|
Kanika retired on 1st April, 2016. For this purpose, the following adjustments were agreed upon:
a Goodwill of the firm was valued at 2 years' purchase of average profits of three completed years preceding the date of retirement. The profits for the year:
2013-14 were 1,00,000 and for 2014-15 were 1,30,000.
b Fixed Assets were to be increased to 3,00,000.
c Stock was to be valued at 120%.
d The amount payable to Kanika was transferred to her Loan Account.
Prepare Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the reconstituted firm.