Question

PRACTICAL PROBLEM

Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively. Their Balance Sheet as on 31^st March, 2012 was as follows:

Balance Sheet as on 31-03-2012
Liabilities	Amount Rs	Assets	Amount Rs
Bills Payable	30,000	Machinery	40,000
Capitals:		Furniture	5,000
Sanil	80,000	Sundry Assets	60,000
Nitish	50,000	Stock	30,000
Sapna	30,000	Debtors	32,000
		Bank	23,000
	1,90,000		1,90,000

Sapna decided to retire on 1^st April 2012 on following terms:-

1) Goodwill of the firm will be valued at Rs 30,000/-

2) Furniture was taken over by Sanil for Rs 4,700/-

3) Make a provision for unpaid expenses Rs 1,700/-

4) Out of the amount due to Sapna Rs 7,500/- to be paid by cheque and the remaining amount to be transferred to her loan account.

Answer 1

Profit and Loss Adjustment Account
Dr.	Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Furniture		300	Loss transferred to:
Provision for Unpaid Expenses		1,700	Sanil’s Capital	1,000
			Nitish’s Capital	667
			Sapna’s Capital	333	2,000
		2,000			2,000

Partners’ Capital Accounts
Dr.	Cr.
Particulars		Sanil	Nitish	Sapna	Particulars	Sanil	Nitish	Sapna
Profit and Loss Adjustment A/c (Loss)		1,000	667	333	Balance b/d	80,000	50,000	30,000
Furniture A/c		4,700			Goodwill	15,000	10,000	5,000
Bank A/c				7,500
Loan A/c				27,167
Balance c/d		89,300	59,333
		95,000	60,000	35,000		95,000	60,000	35,000

Balance Sheet as on April 01, 2012 after Sapna’s retirement
Liabilities		Amount Rs	Assets	Amount Rs
Bills Payable		30,000	Machinery	40,000
Capital A/cs:			Sundry Assets	60,000
Sanil	89,300		Stock	30,000
Nitish	59,333	1,48,633	Debtors	32,000
Provision for Unpaid Expenses		1,700	Bank (23,000-7,500)	15,500
Loan A/c of Sapna		27,167	Goodwill	30,000
		2,07,500		2,07,500

Note: As per the book the Total of Balance Sheet is Rs 2,12,200 but as per our solution it should be Rs 2,07,500.