needed with working notes

1. Q.1 Arjun, Bhim and Kartik are partners in a firm sharing profits in the ratio of 2:2:1. Partners are entitled to interest on capital 6% per annum and Salaries of RO 120 per month. The Following balances were extracted from their books on 30th March, 2020. Arjun's Capital 30,000 Arjun's Drawings 1,125 Bhim's Capital 25,000 Bhim's Drawings 1,000 Kartik Capital 15,000 Kartik Drawings 1,500 Office Salaries 4.965 Plant and Machinery 32,100 Purchases 79,085 Sales 142,235 Buildings 36,870 Interest Dr. 1,060 Advertising 1,075 General Charges 2,670 Discount Cr. 200 Bad debts 625 Taxes and Insurance 1,235 Furniture 1,000 Repairs 1,245 Rent 25.785 Opening Stock of Raw Material 18,995 Cash in Hand 5.745 Office expense 1,730 Sundry Debtors 15.710 Sundry Creditors 14,300 Bills Receivable 4,465 Loan @6.5% 1,250 Prepare Profit and Loss Account for the year ended 30th May, 2021 and a Balance Sheet as at that date. In doing so the following adjustments are required to be made. 1. Closing stock was Valued RO 36,000 2. Write off depreciation on plant and machinery at 10%, on Buildings at 5% and on Furniture at 11.5%, 3. Further Bad debts RO 1,000 4. RO 800 for Rent and RO 1,000 for salaries are outstanding. 2. The Following was the Balance sheet of A and B who were sharing profits two thirds and one third on 1 December 2020 Liabilities Amount Assets Amount (RO) (RO) Creditors 65,900 Cash at Bank 1,200 Capitals Sundry debtors 9,700 A 30,000 Stock 20,000 B 20,000 Plant and Machinery 35,000 Building 50,000 115.900 115.900 They agreed to admit C into Partnership on the following terms: a. C was to be given one third share in profits and was to bring RO 15,000 as Capital b. That the value of stock and plant were to be reduced by 10% c. That the Building Account was to be appreciated by RO 9,500 d. Investment worth RO 400 (not mentioned in the balance sheet) were taken into account Record Necessary Journal Entries and Prepare Revaluation accounts, partners capital accounts and Balance sheet of the new firm. 3. The Balance sheet of P, Q and R who were sharing profits in proportion to their capital stood as under on 31st December 2020: Liabilities Amount Assets Amount (RO) (RO) O Creditors 13,800 Cash at Bank 11,000 Debtors Capital 10,000 9,600 P 45,000 Less: Provision 16,200 30,000 400 17,000 R 15,000 Stock 50,000 Machinery Building | 103,800 103,800 Q decides to retire on that date and P, Q and R agree to make the following adjustments of the assets and Liabilities: a. Unexpired Insurance of RO 1,500 will be taken in the books of accounts b. Provision for Doubtful debts be brought upto 7 percent C. Land and Building be appreciated by 20 percent d. That a provision of RO 4,000 be made in respect of an outstanding bill for repairs e. That the goodwill of the entire firm be fixed at RO 21,600 and Q share of the same be adjusted into the accounts of P and R who are going to share in future in the proportion of and respectively. Pass necessary Journal entries and prepare necessary accounts by transferring Q's share of Capital to his loan account