53 :- Meghna, Mehak and Mandeep were partners in a firm whose balance sheet as on 31st March, 2023 was as under :-
Mehak retired on this date under following terms :-
(a) To reduce stock and furniture by 5% and 10% respectively.
(b) To provide for doubtful debts at 10% on debtors.
(c) Goodwill was valued at Rs 12,000
(d) Creditors of Rs 8,000 were settled at Rs 7,100
(e) Mehak should be paid off and the entire sun payable to Mehak shall be brought in by Meghna and Mandeep in such a way that their capitals should be in their new profit sharing ratio and a balance of Rs 25,000 is maintained in the cash account.
Prepare Revaluation account and Partner’s Capital Accounts of the new firm.
Solution :-
WORKING NOTES
(i)Calculation of share of goodwill
Mehak’s share of goodwill = 12,000 x 1/3 = 4,000
Gaining ratio of Meghna and Mandeep is 1:1
Meghna’s share of goodwill = 4,000 x 1/2 = Rs 2,000
Mandeep’s share of goodwill = 4,000 x 1/2 = Rs 2,000
(ii) Calculation of New capital of Meghna and Mandeep
New profit sharing ratio of Meghna and Mandeep is 1:1
Cash Balance = 27,000 – 7,100 = Rs 19,900
Minimum cash balance should be Rs 25,000, therefore, (25,000 – 19,900) I.e, 5,100 has to be brought in.
Total cash to be brought in by them = 20,000 + 5,100
= Rs 25,100
Total capital of the new firm = Capital balances of partners + cash to be brought in
= 19,500 + 9,500 + 25,100
= Rs 54,100
Total capital of the firm should be in 1:1
Therefore, New capital of Meghna = 54,100 x 1/2 = Rs 27,050
New capital of Mandeep = 54,100 x 1/2 = Rs 27,050
