35 :- Chintan, Ayush and Sudha were partners in a firm sharing profits and losses in the ratio of 5:3:2. On 31st March, 2019, their balance sheet was as follows
Chintan retired on the above date and it was agreed that
- Debtors of Rs 5,000 to be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts was to be created
- Goodwill of the firm on Chintan’s retirement was valued at Rs 1,00,000 and Chintan’s share of the same will be adjusted by debiting the capital accounts of Ayush and Sudha.
- Stock was revalued at Rs 36,000
- Furniture was undervalued by Rs 9,000
- Liability for workmen compensation of Rs 2,000 was to be created
- Chintan was to be paud Rs 20,000 by cheque and the balance was to be transferred to his loan account.
Pass the necessary jounal entries in the books of the firm on Chintan’s retirement.
Solution :-
