Accountancy – Not-for-Profit Organisation and Partnership Accounts As Gagan got a very good break at an MNC, so he decided to retire on that date and it was decided that Shyam and Ram would share the future profits in the ratio of 5 : 3. Goodwill was valued at Rs. 70,000; Machinery at Rs. 78,000; Buildings at Rs. 1,52,000; stock at Rs. 30,000; and bad debts amounting to Rs. 1,550 were to be written off. Record journal entries in the books of the firm and prepare the Balance Sheet of the new firm. Solution Books of Shyam, Ram and Gagan Journal Date Particulars L.F. Debit Amount (Rs.) Credit Amount (Rs.) 2015 Mar. 31 Revaluation A/c Dr. To Machinery A/c To Stock A/c To Debtors A/c (Loss on revaluation of assets recorded on Gagan’s retirement) 20,550 30,000 7,000 12,000 1,550 Building A/c Dr. To Revaluation A/c (Appreciation in the value of Building on Gagan’s retirement) 9,450 30,000 Revaluation A/c Dr. To Shyam’s Capital A/c 3,780 To Gagan’s Capital A/c 3,780 To Ram’s Capital A/c (Profit on revaluation transferred to partners’ capital accounts in the ratio of 2 : 2 : 1) 14,500 1,890 Reserve A/c Dr. To Shyam’s Capital A/c 5,800 To Gagan’s Capital A/c 5,800 To Ram’s Capital A/c (Reserve transferred to partner’s capital accounts) 15,750 2,900 Shyam’s Capital A/c Dr. Ram’s Capital A/c Dr. 12,250 To Gagan’s Capital A/c (Gagan’s share of goodwill adjusted to Shyam and Ram in their gaining ratio of 9 : 7) 1,00,080 28,000 Gagan’s Capital A/c Dr. To Gagan’s Loan A/c (Amount payable to retiring partner transferred to his loan account) 1,00,080

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