Given below is a Balance Sheet of Aditya, Ajinkya and Arun, who were partners in a firm sharing profits and losses in the ratio 5 : 3 : 2. Their Balance Sheet as on 31st March 2020 was as follows: | Liabilities | Amount (₹) | Assets | Amount (₹) | | --- | --- | --- | --- | | Creditors | 10,450 | Cash | 3,800 | | Reserve Fund | 7,500 | Debtors | 9,000 | | Capital Account: | | Stock | 8,750 | | Aditya | 21,000 | Machinery | 50,000 | | Ajinkya | 18,500 | Furniture | 2,500 | | Arun | 16,600 | | | | | 74,050 | | 74,050 | On 1st April 2020 Arun retired on the following terms: Goodwill of the firm will be raised in the books at ₹ 10,000. Stocks to be reduced by 10%, furniture by 5% and Machinery by 10%. R.B.D.D. be maintained at 5% on debtors. ₹ 100 to be written off from creditors. All the amount due to Arun transferred to his loan account. Prepare: Profit and Loss adjustment account. Partners Capital Account. Balance Sheet of the new firm.

> > [!TLDR] > Revalue assets → net loss ₹6,350 (5:3:2 → 3,175 : 1,905 : 1,270). Distribute Reserve Fund ₹7,500 (3,750 : 2,250 : 1,500) and raise goodwill ₹10,000 (5,000 : 3,000 : 2,000). Arun's closing capital ₹18,830 goes to his Loan A/c. New Balance Sheet totals ₹77,600 with goodwill ₹10,000 still on the books. > > **Working Note 1 — Revaluation figures** > - Stock down 10% of 8,750 = 875; Furniture down 5% of 2,500 = 125; Machinery down 10% of 50,000 = 5,000; R.B.D.D. 5% of 9,000 = 450 (all losses). > - ₹100 written off creditors = gain of 100. > - Net loss = (875 + 125 + 5,000 + 450) − 100 = 6,450 − 100 = **₹6,350**, shared 5:3:2. > > **Profit and Loss Adjustment (Revaluation) Account** > > | Particulars | Amount (₹) | Particulars | Amount (₹) | > | --- | --- | --- | --- | > | To Stock A/c | 875 | By Creditors A/c | 100 | > | To Furniture A/c | 125 | By Loss transferred to Capital A/cs: | | > | To Machinery A/c | 5,000 | Aditya (5/10) | 3,175 | > | To R.B.D.D. A/c | 450 | Ajinkya (3/10) | 1,905 | > | | | Arun (2/10) | 1,270 | > | **Total** | **6,450** | **Total** | **6,450** | > > **Partners' Capital Accounts** > > | Particulars | Aditya (₹) | Ajinkya (₹) | Arun (₹) | Particulars | Aditya (₹) | Ajinkya (₹) | Arun (₹) | > | --- | --- | --- | --- | --- | --- | --- | --- | > | To P&L Adjustment A/c (loss) | 3,175 | 1,905 | 1,270 | By Balance b/d | 21,000 | 18,500 | 16,600 | > | To Arun's Loan A/c | — | — | 18,830 | By Reserve Fund A/c | 3,750 | 2,250 | 1,500 | > | To Balance c/d | 26,575 | 21,845 | — | By Goodwill A/c | 5,000 | 3,000 | 2,000 | > | **Total** | **29,750** | **23,750** | **20,100** | **Total** | **29,750** | **23,750** | **20,100** | > > *Working Note 2 — Reserve Fund ₹7,500 in 5:3:2 = 3,750 : 2,250 : 1,500. Goodwill raised ₹10,000 in 5:3:2 = 5,000 : 3,000 : 2,000; since goodwill is only 'raised in the books', it stays as an asset.* > …

Given below is a Balance Sheet of Aditya, Ajinkya and Arun, who were partners in a firm sharing profits and lo

Question 23 of 27

Given below is a Balance Sheet of Aditya, Ajinkya and Arun, who were partners in a firm sharing profits and losses in the ratio 5 : 3 : 2.

Their Balance Sheet as on 31st March 2020 was as follows:

Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	10,450	Cash	3,800
Reserve Fund	7,500	Debtors	9,000
Capital Account:		Stock	8,750
Aditya	21,000	Machinery	50,000
Ajinkya	18,500	Furniture	2,500
Arun	16,600
	74,050		74,050
On 1st April 2020 Arun retired on the following terms:
Goodwill of the firm will be raised in the books at ₹
10,000.
Stocks to be reduced by 10%, furniture by 5% and Machinery by 10%.
R.B.D.D. be maintained at 5% on debtors.
₹ 100 to be written off from creditors.
All the amount due to Arun 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 2025Subjective· 10mImportance★★★★★

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Revalue assets → net loss ₹6,350 (5:3:2 → 3,175 : 1,905 : 1,270). Distribute Reserve Fund ₹7,500 (3,750 : 2,250 : 1,500) and raise goodwill ₹10,000 (5,000 : 3,000 : 2,000). Arun's closing capital ₹18,830 goes to his Loan A/c. New Balance Sheet totals ₹77,600 with goodwill ₹10,000 still on the books.

Working Note 1 — Revaluation figures

Stock down 10% of 8,750 = 875; Furniture down 5% of 2,500 = 125; Machinery down 10% of 50,000 = 5,000; R.B.D.D. 5% of 9,000 = 450 (all losses).
₹100 written off creditors = gain of 100.
Net loss = (875 + 125 + 5,000 + 450) − 100 = 6,450 − 100 = ₹6,350, shared 5:3:2.

Profit and Loss Adjustment (Revaluation) Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Stock A/c	875	By Creditors A/c	100
To Furniture A/c	125	By Loss transferred to Capital A/cs:
To Machinery A/c	5,000	Aditya (5/10)	3,175
To R.B.D.D. A/c	450	Ajinkya (3/10)	1,905
		Arun (2/10)	1,270
Total	6,450	Total	6,450

Partners' Capital Accounts

Particulars	Aditya (₹)	Ajinkya (₹)	Arun (₹)	Particulars	Aditya (₹)	Ajinkya (₹)	Arun (₹)
To P&L Adjustment A/c (loss)	3,175	1,905	1,270	By Balance b/d	21,000	18,500	16,600
To Arun's Loan A/c	—	—	18,830	By Reserve Fund A/c	3,750	2,250	1,500
To Balance c/d	26,575	21,845	—	By Goodwill A/c	5,000	3,000	2,000
Total	29,750	23,750	20,100	Total	29,750	23,750	20,100

Working Note 2 — Reserve Fund ₹7,500 in 5:3:2 = 3,750 : 2,250 : 1,500. Goodwill raised ₹10,000 in 5:3:2 = 5,000 : 3,000 : 2,000; since goodwill is only 'raised in the books', it stays as an asset.

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