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Question:

Banwari, Girdhari and Murari are partners in a firm sharing profits and losses in the ratio of 4:5:6. On 31st March, 2014, Girdhari retired. On that date the capitals of Banwari, Girdhari and Murari before the necessary adjustments stood at Rs.2,00,000, Rs.1,00,000 and Rs.50,000 respectively. On Girdhari's retirement, goodwill of the firm was valued at Rs.1,14,000. Revaluation of assets and re-assessment of liabilities resulted in a profit of Rs.6,000. General Reserve stood in the books of the firm at Rs.30,000. The amount payable to Girdhari was transferred to his loan account. Banwari and Murari agreed to pay Girdhari two yearly instalments of Rs.75,000 each including interest @ 10%

Solution:

Girdhari’s Capital A/c
ParticularsAmt.ParticularsAmt.
By Balance b/d1,00,000By Banwari A/c (Goodwill)15,200
By Murari A/c (Goodwill)22,800
By Revaluation A/c (Profit)2,000
By General Reserve A/c10,000
To Girdhari’s Loan A/c1,50,000
1,50,0001,50,000

Girdhari’s Loan A/c
DateParticularsAmt.DateParticularsAmt.
31.3.14To Balance c/d1,50,00031.3.14By Girdhari’s Capital A/c1,50,000
1,50,0001,50,000
31.3.15To Bank A/c (60,000 + 15,000)75,00001.4.14By Balance b/d1,50,000
31.3.15To Balance c/d90,00001.04.15By Interest A/c (1,50,000 X 10%