Question

Kushal Kumar and Kavita were partners in a firm sharing profit in the ratio of $3:1:1$
On $1stApril,2012$ their Balance Sheet was as follows:
On the above date Kavita retired and the following was agreed :
(i) Goodwill of the firm was valued at Rs 40,000.
(ii) Land was to be appreciated by 30% and building was to be depreciated by Rs 1,00,000.
(iii) Value of furniture was to be reduced by Rs 20,000. (iv) Bad debts reserve is to be increased to Rs 15,000. (v) 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.
(vi) Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita's retirement.

Answer 1

Total Capital of Kushal $=3,72,000-3000=3,69,000$
Total Capital of Kumar $=3,04,000-1,000=3,03,000$
Total Capital of new firm $=3,69,000+3,03,000=6,72,000$
The new Capital has to be in the new profit sharing ratio $=3:1$
Therefore Kushal's new capital $=6,72,000\times \frac{3}{4}=5,04,000$
kumar's kushal's new capital $6.72,000\times \frac{1}{4}=1,68,000$.