Sandra & Co. is a partnership firm with partners Mr. P, Mr. Q and Mr. R,...

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Sandra & Co. is a partnership firm with partners Mr. P, Mr. Q and Mr. R, sharing profits and losses in the ratio of 10:6:4. The balance sheet of the firm as at 31st March, 2018 is as under: Liabilities Assets Capitals: Land Buildings Plant and machinery 10,000 2,00,000 1,30,000 Mr. P Mr. Q Mr. R 80,000 20,000 30,000 Furniture 43,000 12,000 1,30,000 1,39,000 1,30,000 Investments Reserves Inventories 20,000 (un-appropriated profit) Long Term Debt Bank Overdraft Trade payables Trade receivables 3,00,000 44,000 1,70,000 6,64,000 6,64,000 It was mutually agreed that Mr. Q will retire from partnership and in his place Mr. T will be admitted as a partner with effect from 1st April, 2018. For this purpose, the following adjustments are to be made: a) Goodwill is to be valued at $1 lakh but the same will not appear as an asset in the books of the reconstituted firm. b) Buildings and plant and machinery are to be depreciated by 5% and 20% respectively. Investments are to be taken over by the retiring partner at $ 15,000. Provision of 20% is to be made on Trade receivables to cover doubtful debts. c) In the reconstituted firm, the total capital will be $2 lakhs which will be contributed by Mr. P, Mr. R and Mr. T in their new profit sharing ratio, which is 2:2:1. i. The surplus funds, if any, will be used for repaying bank overdraft. ii. The amount due to retiring partner shall be transferred to his loan account. Required: Prepare (a) Revaluation account; (b) Partners' capital accounts; Sandra & Co. is a partnership firm with partners Mr. P, Mr. Q and Mr. R, sharing profits and losses in the ratio of 10:6:4. The balance sheet of the firm as at 31st March, 2018 is as under: Liabilities Assets Capitals: Land Buildings Plant and machinery 10,000 2,00,000 1,30,000 Mr. P Mr. Q Mr. R 80,000 20,000 30,000 Furniture 43,000 12,000 1,30,000 1,39,000 1,30,000 Investments Reserves Inventories 20,000 (un-appropriated profit) Long Term Debt Bank Overdraft Trade payables Trade receivables 3,00,000 44,000 1,70,000 6,64,000 6,64,000 It was mutually agreed that Mr. Q will retire from partnership and in his place Mr. T will be admitted as a partner with effect from 1st April, 2018. For this purpose, the following adjustments are to be made: a) Goodwill is to be valued at $1 lakh but the same will not appear as an asset in the books of the reconstituted firm. b) Buildings and plant and machinery are to be depreciated by 5% and 20% respectively. Investments are to be taken over by the retiring partner at $ 15,000. Provision of 20% is to be made on Trade receivables to cover doubtful debts. c) In the reconstituted firm, the total capital will be $2 lakhs which will be contributed by Mr. P, Mr. R and Mr. T in their new profit sharing ratio, which is 2:2:1. i. The surplus funds, if any, will be used for repaying bank overdraft. ii. The amount due to retiring partner shall be transferred to his loan account. Required: Prepare (a) Revaluation account; (b) Partners' capital accounts;

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Revaluation Account To Buildings Ac To ... View the full answer