Pihu, Geeta and Nita are partners in a firm, sharing profits and losses in the ratio of 3:2:1. On 31st March, 2015, their Balance Sheet was as under :
Nita retires on 1st April, 2015, subject to the following adjustments:
(a) Land and building to be reduced by 10%.
(b) Goodwill to be valued at Rs 54,000.
(c) Provision for Doubtful Debts to be raised to 10% of the debtors, the excess provision being created from General Reserve. The balance of the General Reserve to be distributed amongst the partners.
(d) Creditors of Rs 3,000 were paid by Pihu for which she is not to be reimbursed.
(e) The continuing partners to share profits and losses in future in the ratio of 5:4.
(f) Nita to be paid Rs 29,800 on retirement and the remaining amount in two equal annual installments.
together with interest @ 10% per annum on the outstanding balance. The first installment of Nita’s loan to be paid on 31st March, 2016.
You are required to prepare:
(i) Revaluation Account.
(ii) Partners’ Capital Accounts.
(iii) Nita’s Loan Account till it is finally closed.
