Promil, Kamlesh and Ritika were partners in a firm sharing profits and losses in the ratio of $\displaystyle 5$ : $\displaystyle 3$ : 2. From 1st April, $\displaystyle 2025$ they decided to share future profits in the ratio of $\displaystyle 2$ : $\displaystyle 3$ : 5. On 31st March, $\displaystyle 2025$, their Balance Sheet was as follows : Balance Sheet of Promil, Kamlesh and Ritika as at 31st March, $\displaystyle 2025$ Amount Amount Liabilities Assets ( ) ( ) Sundry Creditors $\displaystyle 3,00,000$ Bank $\displaystyle 1,80,000$ General Reserve $\displaystyle 1,60,000$ Sundry Debtors $\displaystyle 1,20,000$ Capitals : Stock $\displaystyle 2,40,000$ Promil $\displaystyle 2,80,000$ Land and Building $\displaystyle 5,60,000$ Kamlesh $\displaystyle 2,20,000$ Ritika $\displaystyle 1,40,000$ $\displaystyle 6,40,000$ $\displaystyle 11,00,000$ $\displaystyle 11,00,000$ It was agreed that : (i) Land and Building will be valued at $\displaystyle 6,62$,000. (ii) A provision of $\displaystyle 5$% on debtors will be made for bad and doubtful debts. (iii) Goodwill of the firm will be valued at $\displaystyle 1,80,000$ and the same will be treated without opening goodwill account. (iv) The value of stock will be reduced to $\displaystyle 2,00$,000. Showing your working clearly, pass necessary journal entries for the above transactions in the books of the firm.

OR

Mr. Rinku and Mrs. Pinky were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. On 31st March, $\displaystyle 2025$, their balance sheet was as follows : Balance Sheet of Mr. Rinku and Mrs. Pinky as at 31st March, $\displaystyle 2025$ Amount Amount Liabilities Assets ( ) ( ) Creditors $\displaystyle 86,000$ Cash at Bank $\displaystyle 43,000$ M is. Rinku's Loan $\displaystyle 20,000$ Stock $\displaystyle 20,000$ Pinky's Husband's $\displaystyle 30,000$ Investments $\displaystyle 30,000$ Loan Debtors $\displaystyle 50,000$ Investment Less : Fluctuation Fund $\displaystyle 12,000$ Provision for doubtful debts $\displaystyle 5,000$ $\displaystyle 45,000$ General Reserve $\displaystyle 30,000$ Building $\displaystyle 3,40,000$ Capitals : Mr. Rinku $\displaystyle 1,00,000$ Mrs. Pinky ₹ $\displaystyle 2,00,000$ $\displaystyle 3,00,000$ $\displaystyle 4,78,000$ $\displaystyle 4,78,000$ On the above date the firm was dissolved and the following transactions took place : (i) Mr. Rinku agreed to pay Mrs. Rinku's loan and took away stock for $\displaystyle 16$,000. (ii) Mrs. Pinky took half of the investments at $\displaystyle 10$% less. Debtors realised $\displaystyle 44,000$, Building realised $\displaystyle 4,00,000$, Creditors were paid $\displaystyle 5,000$ less and the remaining investments were sold for ₹ $\displaystyle 19$,000. An old furniture not recorded in the books of the firm was taken over by Mrs. Pinky for ₹ $\displaystyle 18$,000. Realisation expenses amounted to $\displaystyle 6$,000. Prepare Realisation Account.

Books of Promil, Kamlesh and Ritika Journal Date Particulars L. Dr. Cr. F. Amount Amount (₹) (₹) $\displaystyle 2025$ General Reserve A/c Dr. $\displaystyle 1,60,000$ April $\displaystyle 1$ To Promil’s Capital A/c $\displaystyle 80.000$ To Kamlesh’s Capital A/c $\displaystyle 48,000$ To Ritika’s Capital A/c $\displaystyle 32,000$ (General reserve transferred to all partners in old ratio) ,, Revaluation A/c Dr. $\displaystyle 46,000$ To Provision for Bad Debts A/c $\displaystyle 6,000$ To Stock A/c $\displaystyle 40,000$ (Revaluation account debited for creating provision for bad debts and reduction in stock) ,, Land and Building A/c Dr. $\displaystyle 1,02,000$ To Revaluation A/c (Land and building revalued) $\displaystyle 1,02,000$ ,, Revaluation A/c Dr. $\displaystyle 56,000$ To Promil’s Capital A/c $\displaystyle 28,000$ To Kamlesh’s Capital A/c $\displaystyle 16,800$ To Ritika’s Capital A/c $\displaystyle 11,200$ (Gain on revaluation transferred to all partners in old ratio) Ritika’s Capital A/c Dr. $\displaystyle 54,000$ To Promil’s Capital A/c $\displaystyle 54,000$ (Adjustment entry for goodwill made) Working Notes: Calculation of sacrifice/gain: Sacrificing share = Old Share - New Share Promil : $\displaystyle 5$/$\displaystyle 10$ - $\displaystyle 2$/$\displaystyle 10$ = $\displaystyle 3$/$\displaystyle 10$ Sacrifice Kamlesh: $\displaystyle 3$/$\displaystyle 10$ - $\displaystyle 3$/$\displaystyle 10$ = Nil Ritika: $\displaystyle 2$/$\displaystyle 10$ - $\displaystyle 5$/$\displaystyle 10$ = ($\displaystyle 3$/$\displaystyle 10$) Gain Q.(b) Mr. Rinku and Mrs. Pinky were partners in a firm…………………………. Ans. Books of Mr. Rinku and Mrs. Pinky Dr. Realisation A/c Cr. Particulars Amount Particulars Amount (₹) (₹) To Sundry Assets: By Sundry liabilities: Stock $\displaystyle 20,000$ Creditors $\displaystyle 86,000$ Investments $\displaystyle 30,000$ Mrs. Rinku’s Loan $\displaystyle 20,000$ Debtors $\displaystyle 50,000$ Pinky’s Husband’s Loan $\displaystyle 30,000$ Building $\displaystyle 3,40,000$ $\displaystyle 4,40,000$½ Investment Fluctuation Fund $\displaystyle 12,000$ To Rinku’s Capital A/c: Provision for doubtful Mrs Rinku’s loan $\displaystyle 20,000$ ½ debts $\displaystyle 5,000$ $\displaystyle 1,53,000$ To Cash/Bank A/c: $\displaystyle 16,000$ Creditors $\displaystyle 81,000$ ½ By Rinku’s Capital A/c – Stock ½ Pinky’s Husband’s $\displaystyle 1,11,000$ By Pinky’s Capital A/c- $\displaystyle 13,500$ ½ Loan $\displaystyle 30,000$ ½ Investments By Pinky’s Capital A/c- To Cash/Bank A/c: Old furniture $\displaystyle 18,000$ ½ Realisation expenses $\displaystyle 6,000$ ½ Gain on Realisation By Cash/Bank A/c: transferred to: Debtors $\displaystyle 44,000$ Mr. Rinku’s Capital $\displaystyle 51,900$ Building $\displaystyle 4,00,000$ Mrs. Pinky’s Capital $\displaystyle 34,600$ Investment $\displaystyle 19,000$ $\displaystyle 4,63,000$ $\displaystyle 1$ $\displaystyle 86,500$ ½ $\displaystyle 6,63,500$ $\displaystyle 6,63,500$