Question 5:
PRACTICAL PROBLEM
Sathe, Deshpande and Madlani were partners sharing profits and losses in the ratio of 5:2:3.
Their Balance Sheet was as follows:
Balance Sheet as on 31st March, 2012
Deshpande retired on that date on the following terms:
1) Plant to be depreciated by 10% and Motor Van by 20%.
2) Stock to be appreciated by 10% and building by 20%.
3) R.D.D. is no longer necessary
4) Provision is to be made for Rs 8,000 being compensation to worker
5) The goodwill of the firm to be valued at Rs 40,000 and Deshpande’s share in it should be raised.
6) Both the remaining partners decided to write off the goodwill
7) Amount payable to Shri. Deshpande to be kept as his Loan
Prepare:
1 ) Profit and Loss Adjustment Account
2) Partner’s Capital Accounts
3) New Balance Sheet
Note: According to the solution provided in the book, amount paid to Deshpande is Rs 34,600but according to our solution it is Rs 94,600.
