Arnav, Bhavi and Chavi were in partnership sharing profits and losses in the ratio of $\displaystyle 3$ : $\displaystyle 2$ : 1. On 31st March, $\displaystyle 2023$, their Balance Sheet was as follows : Balance Sheet ofAlrnav, Bhavi and Chavi as at 31s*March, $\displaystyle 2023$ Amount Amount Liabilities Assets c) ca Capitals : Plant & Machinery $\displaystyle 3,00,000$ Arnav $\displaystyle 1,80,000$ Furniture $\displaystyle 20,000$ Bhavl $\displaystyle 1,60,000$ Debtors $\displaystyle 3,50,000$ Chavl $\displaystyle 1,00,000$ $\displaystyle 4,410,000$ Less : Provision for doubt- Creditors $\displaystyle 2,50,000$ ful debts $\displaystyle 20,000$ $\displaystyle 3,30,000$ Cash in hand $\displaystyle 10,000$ Profit and Loss Account $\displaystyle 30,000$ $\displaystyle 6,90,000$ $\displaystyle 6,90,000$ Chavi retired on the above date. It was agreed that : (i) Plant and Machinery be valued at ₹ $\displaystyle 4,30$,000. (ii) The existing Provision for Bad Debts was to be increased by $\displaystyle 50$% . (iii) Chavi's share of Goodwill was valued at ₹ $\displaystyle 80,000$ and the same was to be treated without opening goodwill account. (iv) The total amount to be paid to Chavi was brought in by Arnav and Bhavi in such a way as to make their capitals in proportion to their new profit sharing ratio. Prepare Revaluation Account and Partners' Capital Accounts.

OR

Divya and Ekta were partners in a firm sharing profits in the ratio of $\displaystyle 3$ : 1. On 31st March, $\displaystyle 2023$ they admitted Sona as a new partner for $\displaystyle 1$/4th share in the profits of the firm. Their Balance Sheet on that date was as follows $\displaystyle 1$ Balance Sheet of Divya and Ekta as at $\displaystyle 315$* March, $\displaystyle 2023$ Amount Amount Liabilities Assets c) ca Capitals : Land and Building $\displaystyle 5,00,000$ Divya $\displaystyle 10,00,000$ Machinery $\displaystyle 6,00,000$ Ekta $\displaystyle 7,00,000$ $\displaystyle 17,00,000$ Stock $\displaystyle 1,50,000$ General Reserve $\displaystyle 3,20,000$ Debtors $\displaystyle 4,00,000$ Creditors $\displaystyle 5,40,000$ Less : Provlslon for doubtful debts $\displaystyle 30,000$ $\displaystyle 3,70,000$ Investments $\displaystyle 5,00,000$ Cash $\displaystyle 4,40,000$ $\displaystyle 25,60,000$ $\displaystyle 25,60,000$ Sona will bring ₹ $\displaystyle 4,00,000$ as her capital and her share of goodwill in cash. It was agreed that : (i) Goodwill of the firm was valued at ₹ $\displaystyle 2,40$,000. (ii) Land & Building were valued at ₹ $\displaystyle 7,12$,000. (iii) Provision for doubtful debts was found to be in excess by ₹ $\displaystyle 8,000$ (iv) A liability for ₹ $\displaystyle 20,000$ included in Creditors was not likely to arise . (v) The capitals of Divya and Ekta will be adjusted on the basis of Sonars capital by opening current accounts. Prepare Revaluation Account and Partners' Capital Accounts.

Dr. Revaluation A/c Cr. Particulars Amount Particulars Amount ( ) ( ) To Provision for doubtful $\displaystyle 10,000$ By Plant and Machinery A/c ½ $\displaystyle 1,30,000$ debts A/c ½ To Profit transferred to Partners’ Capital A/c’s: ½ Arnav $\displaystyle 60,000$ Bhavi $\displaystyle 40,000$ $\displaystyle 1,20,000$ Chavi $\displaystyle 20,000$ $\displaystyle 1,30,000$ $\displaystyle 1,30,000$ Dr. Partners’ Capital Accounts Cr. Particulars Arnav Bhavi Chavi Particulars Arnav Bhavi Chavi ₹ ₹ ₹ ₹ ₹ ₹ To Chavi’s $\displaystyle 48,000$ $\displaystyle 32,000$ - By Balance b/d $\displaystyle 1,80,000$ $\displaystyle 1,60,000$ $\displaystyle 1,00,000$ Capital A/c ½ ½ By Revaluation To Profit and $\displaystyle 15,000$ $\displaystyle 10,000$ $\displaystyle 5,000$ A/c ½ $\displaystyle 60,000$ $\displaystyle 40,000$ $\displaystyle 20,000$ Loss A/c ½ By Arnav’s To Cash A/c ½ Capital A/c ½ $\displaystyle 3,18,000$ $\displaystyle 2,12,000$ - To Balance c/d By Bhavi’s ½ Capital A/c ½ $\displaystyle 1,41,000$ $\displaystyle 54,000$ - By Cash A/c ½ $\displaystyle 3,81,000$ $\displaystyle 2,54,000$ $\displaystyle 2,00,000$ $\displaystyle 3,81,000$ $\displaystyle 2,54,000$ $\displaystyle 2,00,000$ Q. (b) Divya and Ekta were partners in a firm…. Ans. Dr. Revaluation A/c Cr. Particulars Amount Particulars Amount ( ) ( ) To Profit transferred to By Land and Building A/c ½ $\displaystyle 2,12,000$ Partners’ Capital A/c’s: ½ Divya $\displaystyle 1,80,000$ By Provision for doubtful debts A/c $\displaystyle 8,000$ Ekta $\displaystyle 60,000$ $\displaystyle 2,40,000$ ½ $\displaystyle 20,000$ By Creditors A/c ½ $\displaystyle 2,40,000$ $\displaystyle 2,40,000$ Dr. Partners’ Capital Accounts Cr. Particulars Divya Ekta Sona Particulars Divya Ekta Sona ₹ ₹ ₹ ₹ ₹ ₹ To Partners $\displaystyle 5,65,000$ $\displaystyle 5,55,000$ - By Balance b/d $\displaystyle 10,00,000$ $\displaystyle 7,00,000$ - Current A/c’s ½ $\displaystyle 1$ By Cash A/c - - $\displaystyle 4,00,000$ $\displaystyle 9,00,000$ $\displaystyle 3,00,000$ $\displaystyle 4,00,000$ To Balance By Revaluation $\displaystyle 1,80,000$ $\displaystyle 60,000$ - c/d. ½ A/c ½ By General $\displaystyle 2,40,000$ $\displaystyle 80,000$ - Reserve A/c By Premium for $\displaystyle 45,000$ $\displaystyle 15,000$ Goodwill A/c $\displaystyle 14,65,000$ $\displaystyle 8,55,000$ $\displaystyle 4,00,000$ $\displaystyle 14,65,000$ $\displaystyle 8,55,000$ $\displaystyle 4,00,000$ ..