Ratan, Singh and Sharma were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : $\displaystyle 2$ : 1. Their Balance Sheet on 31st March, $\displaystyle 2024$ was as follows : Balance Sheet of Ratan, Singh and Sharma as at 31st March, $\displaystyle 2024$ Amount Amount Liabilities Assets ( ) ( ) Creditors $\displaystyle 90,000$ Bank $\displaystyle 65,000$ Outstanding Wages $\displaystyle 10,000$ Stock $\displaystyle 1,50,000$ General Reserve $\displaystyle 3,00,000$ Debtors $\displaystyle 90,000$ Less : Provision for Capitals : Doubtful Debts ₹ $\displaystyle 5,000$ $\displaystyle 85,000$ Ratan $\displaystyle 3,60,000$ Plant and Machinery $\displaystyle 2,50,000$ Singh $\displaystyle 2,40,000$ Land and Building $\displaystyle 4,50,000$ Sharma $\displaystyle 1,00,000$ $\displaystyle 7,00,000$ Profit and Loss A/c $\displaystyle 1,00,000$ $\displaystyle 11,00,000$ $\displaystyle 11,00,000$ On 1st April, $\displaystyle 2024$ Sharma retired from the firm on the following terms : (i) Plant and Machinery is revalued at $\displaystyle 2,00$,000. (ii) Land and Building was to be appreciated by $\displaystyle 49,500$ and provision for bad debts will be maintained at $\displaystyle 5$% of the debtors. (iii) Sharma's share in the goodwill of the firm was valued at ₹ $\displaystyle 60,000$ and the retiring artner's share was adjusted through the capital accounts of remaining partners. (iv) Sharma was paid in cash brought by Ratan and Singh in such a way so as to make their capitals proportionate to their new profit sharing ratio. Prepare Revaluation Account and Partners' Capital Accounts.

OR

Mita and Vihaan were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. On 31st March, $\displaystyle 2024$ their Balance Sheet was as follows : Balance Sheet of Mita and Vihaan as at 31st March, $\displaystyle 2024$ Amount Amount Liabilities Assets ( ) ( ) Sundry Creditors $\displaystyle 2,00,000$ Cash $\displaystyle 50,000$ Sundry Debtors $\displaystyle 2,00,000$ Capitals : Less : Provision for doubtful debts $\displaystyle 7,000$ $\displaystyle 1$ , $\displaystyle 93,000$ Mita $\displaystyle 4,00,000$ Stock $\displaystyle 2$ , ₹ $\displaystyle 0,000$ Vihaan ₹ $\displaystyle 3,00,000$ $\displaystyle 7,00,000$ Plant and Machinery $\displaystyle 3$ , $\displaystyle 5$ $\displaystyle 0$ ,$\displaystyle 000$ Patents $\displaystyle 57,000$ $\displaystyle 9,00,000$ $\displaystyle 9,00,000$ $\displaystyle 4$ On the above date, Zen was admitted as a new partner for th $\displaystyle 15$ share in the profits on the following terms : (i) Zen will bring $\displaystyle 3,00,000$ as his capital and his share of oodwill premium in cash. On Zen's admission, goodwill of the firm was valued at $\displaystyle 4,12$,500. (ii) The provision for bad debts will be maintained at $\displaystyle 5$% of the debtors. (iii) Stock will be valued at ₹ $\displaystyle 2,00,000$, plant and machinery at $\displaystyle 4,00,000$ and patents at $\displaystyle 1,20$,000. (iv) There was a bill of ₹ $\displaystyle 30,000$ for goods purchased which was omitted from the books. Pass necessary journal entries for the above transactions in the books of the firm on Zen's admission.

In the books of Ratan, Singh and Sharma Dr. Revaluation A/c Cr. Particulars Amount(₹) Particulars Amount(₹) To Plant and Machinery A/c $\displaystyle 50,000$ By Land and Building A/c $\displaystyle 49,500$ By Provision for bad debts $\displaystyle 500$ A/c $\displaystyle 50,000$ $\displaystyle 50,000$ Dr. Partners’ Capital A/c Cr. Particulars Ratan Singh Sharma Particulars Ratan Singh Sharma (₹) (₹) (₹) (₹) (₹) (₹) By Balance b/d To Profit $\displaystyle 40,000$ $\displaystyle 40,000$ $\displaystyle 20,000$ $\displaystyle 3,60,000$ $\displaystyle 2,40,000$ $\displaystyle 1,00,000$ and loss A/c ½ To Sharma’s $\displaystyle 30,000$ $\displaystyle 30,000$ By General $\displaystyle 1,20,000$ $\displaystyle 1,20,000$ $\displaystyle 60,000$ capital A/c Reserve A/c ½ ½ To Bank/Cash $\displaystyle 2,00,000$ By Ratan’s A/c capital A/c $\displaystyle 30,000$ To Balance $\displaystyle 4,50,000$ $\displaystyle 4,50,000$ By Singh’s c/d capital A/c $\displaystyle 30,000$ ½ ½ By Bank A/c $\displaystyle 40,000$ $\displaystyle 1,60,000$ $\displaystyle 5,20,000$ $\displaystyle 5,20,000$ $\displaystyle 2,20,000$ $\displaystyle 5,20,000$ $\displaystyle 5,20,000$ $\displaystyle 2,20,000$ Q.(b) Mita and Vihaan were partners in a firm…………………… Ans. In the books of Mita, Vihaan and Zen Journal Date Particulars L.F. Dr. Cr. Amount(₹) Amount(₹) $\displaystyle 2024$ Cash A/c Dr. $\displaystyle 4,10,000$ March $\displaystyle 31$ To Zen’s capital A/c $\displaystyle 3,00,000$ To Premium for Goodwill A/c $\displaystyle 1,10,000$ (Cash brought by Zen as capital and his share of goodwill ) ,, Premium for Goodwill A/c Dr. $\displaystyle 1,10,000$ To Mita’s capital A/c $\displaystyle 66,000$ To Vihaan’s capital A/c $\displaystyle 44,000$ (Zen’s share of goodwill distributed between the old partners in sacrificing ratio) ,, Revaluation A/c Dr. $\displaystyle 83,000$ To Provision for Bad Debts A/c $\displaystyle 3,000$ To Stock A/c $\displaystyle 50,000$ To Outstanding Bill for Purchases A/c $\displaystyle 30,000$ (Revaluation account debited for increase in provision for bad debts, decrease in stock and recording bill for purchases) ,, Plant and Machinery A/c Dr. $\displaystyle 50,000$ Patents A/c Dr. $\displaystyle 63,000$ To Revaluation A/c $\displaystyle 1,13,000$ (Plant and machinery and patents revalued) ,, Revaluation A/c Dr. $\displaystyle 30,000$ To Mita’s capital A/c $\displaystyle 18,000$ To Vihaan’s capital A/c $\displaystyle 12,000$ (Gain on revaluation transferred to old partners in old ratio)