The balance sheet of Shivshakti Traders, Mumbai is as follows. Partners share profit and losses as 5:2:3. Balance Sheet as on 31 st March, 2020 | Liabilities | Amount (₹) | Assets | | Amount (₹) | | --- | --- | --- | --- | --- | | Creditors | 30,000 | Bank | | 18,600 | | Bills Payable | 1,800 | Debtors | 25,200 | 24,000 | | General Reserve | 21,000 | (-) R.D.D. | 1,200 | | | Capital Accounts: | | Stock | | 30,600 | | Raj | 54,000 | Building | | 60,000 | | Rahul | 48,000 | Plant and Machinery | | 48,000 | | Nitin | 26,400 | | | | | | 1,81,200 | | | 1,81,200 | Rahul retired from the business on 1 st April, 2020 on the Following terms: The assets were revalued as under: Plant and Machinery is to be depreciated by 10%. R.D.D. is 10 be increased upto ₹ 1,500. Building is appreciated by 10%. Stock at ₹ 42,000. The goodwill of retiring partner is valued at ₹ 12,000 and the remaining partners decided that goodwill be written back in their new profit sharing ratio which will be 5:3. Amount due to Rahul at the time of retirement is to be transferred to his loan account. Prepare: Profit and Loss Adjustment Account Partners’ Capital Account Balance Sheet of the New firm.

> > [!TLDR] > Profit & Loss Adjustment (Revaluation) profit ₹12,300 shared 5:2:3. General Reserve ₹21,000 shared 5:2:3. Rahul's goodwill ₹12,000 credited to him and written off by Raj & Nitin in 5:3 (₹7,500 / ₹4,500). Rahul's dues ₹66,660 → Loan A/c. New Balance Sheet totals ₹1,93,500. > > **Working Notes** > > *Gaining ratio* = new − old. Raj: 5/8 − 5/10 = 5/40; Nitin: 3/8 − 3/10 = 3/40 → **5:3**, so goodwill borne by Raj:Nitin in 5:3. > > **Profit and Loss Adjustment Account** > > | Particulars | ₹ | Particulars | ₹ | > | --- | --- | --- | --- | > | To Plant & Machinery A/c (10% of 48,000) | 4,800 | By Building A/c (10% of 60,000) | 6,000 | > | To R.D.D. A/c (1,500 − 1,200) | 300 | By Stock A/c (42,000 − 30,600) | 11,400 | > | To Profit — Raj 6,150 / Rahul 2,460 / Nitin 3,690 | 12,300 | | | > | **Total** | **17,400** | **Total** | **17,400** | > > **Partners' Capital Accounts** > > | Particulars | Raj | Rahul | Nitin | Particulars | Raj | Rahul | Nitin | > | --- | --- | --- | --- | --- | --- | --- | --- | > | To Goodwill A/c (5:3) | 7,500 | — | 4,500 | By Balance b/d | 54,000 | 48,000 | 26,400 | > | To Rahul's Loan A/c | — | 66,660 | — | By General Reserve | 10,500 | 4,200 | 6,300 | > | To Balance c/d | 63,150 | — | 31,890 | By P&L Adjustment (profit) | 6,150 | 2,460 | 3,690 | > | | | | | By Goodwill A/c | — | 12,000 | — | > | **Total** | **70,650** | **66,660** | **36,390** | **Total** | **70,650** | **66,660** | **36,390** | > > **Balance Sheet of the New Firm as on 1st April, 2020** > > | Liabilities | ₹ | Assets | ₹ | > | --- | --- | --- | --- | > | Creditors | 30,000 | Bank | 18,600 | …

The balance sheet of Shivshakti Traders, Mumbai is as follows. Partners share profit and losses as 5:2:3. Bala

Question 20 of 27

The balance sheet of Shivshakti Traders, Mumbai is as follows. Partners share profit and losses as 5:2:3.

Balance Sheet as on 31

March, 2020

Liabilities	Amount (₹)	Assets		Amount (₹)
Creditors	30,000	Bank		18,600
Bills Payable	1,800	Debtors	25,200	24,000
General Reserve	21,000	(-) R.D.D.	1,200
Capital Accounts:		Stock		30,600
Raj	54,000	Building		60,000
Rahul	48,000	Plant and Machinery		48,000
Nitin	26,400
	1,81,200			1,81,200
Rahul retired from the business on 1
st
April, 2020 on the Following terms:
The assets were revalued as under:
Plant and Machinery is to be depreciated by 10%.
R.D.D. is 10 be increased upto ₹ 1,500.
Building is appreciated by 10%.
Stock at ₹ 42,000.
The goodwill of retiring partner is valued at ₹ 12,000 and the remaining partners decided that goodwill be written back in their new profit sharing ratio which will be 5:3.
Amount due to Rahul at the time of retirement is to be transferred to his loan account.
Prepare:
Profit and Loss Adjustment Account
Partners’ Capital Account
Balance Sheet of the New firm.

Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2024Subjective· 10mImportance★★★★★

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Profit & Loss Adjustment (Revaluation) profit ₹12,300 shared 5:2:3. General Reserve ₹21,000 shared 5:2:3. Rahul's goodwill ₹12,000 credited to him and written off by Raj & Nitin in 5:3 (₹7,500 / ₹4,500). Rahul's dues ₹66,660 → Loan A/c. New Balance Sheet totals ₹1,93,500.

Working Notes

Gaining ratio = new − old. Raj: 5/8 − 5/10 = 5/40; Nitin: 3/8 − 3/10 = 3/40 → 5:3, so goodwill borne by Raj:Nitin in 5:3.

Profit and Loss Adjustment Account

Particulars	₹	Particulars	₹
To Plant & Machinery A/c (10% of 48,000)	4,800	By Building A/c (10% of 60,000)	6,000
To R.D.D. A/c (1,500 − 1,200)	300	By Stock A/c (42,000 − 30,600)	11,400
To Profit — Raj 6,150 / Rahul 2,460 / Nitin 3,690	12,300
Total	17,400	Total	17,400

Partners' Capital Accounts

Particulars	Raj	Rahul	Nitin	Particulars	Raj	Rahul	Nitin
To Goodwill A/c (5:3)	7,500	—	4,500	By Balance b/d	54,000	48,000	26,400
To Rahul's Loan A/c	—	66,660	—	By General Reserve	10,500	4,200	6,300
To Balance c/d	63,150	—	31,890	By P&L Adjustment (profit)	6,150	2,460	3,690
				By Goodwill A/c	—	12,000	—
Total	70,650	66,660	36,390	Total	70,650	66,660	36,390

Balance Sheet of the New Firm as on 1st April, 2020

Liabilities	₹	Assets	₹
Creditors	30,000	Bank	18,600

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