# Practical Problem 05

##### Practical Problems | Q 5 | Page 185

Shah, Lodha and Dhole were partners sharing profits and losses in the ratio of 4:3:3.

Their Balance Sheet as on 31st March 2019 is a given below.

Balance Sheet as on 31st March 2019

Liabilities

Amt

Amt

Assets

Amt

Amt

Sundry Creditors

20,000

Cash

9,000

Bills payable

4,000

Sundry Debtors

10,000

Capital Account:

Less: R.D.D.

1,000

9,000

Shah

45,000

Furniture

25,000

Lodha

35,000

Computers

43,000

Dhole

27,000

Vehicles

45,000

1,31,000

1,31,000

On 1st April 2019, Mr. Lodha retired form the firm on the following terms.

 1.  Goodwill is to be valued at an average Profits and Losses of the last five years which were as follows. YEARS Profit/Loss 2015 Rs 35,000 2016 Rs 20,000 2017 Rs 30,000 2018 Rs 20,000 2019 Rs 25,000 2.  Computers to be depreciated by 10% 3.Furniture to be revalued at Rs 27,500 4.  Vehicles appreciated by 20% 5. R.D.D. was no longer necessary 6. Shah and Dhole will share the future profits and losses in the ratio of 2:1 7.  It was decided that goodwill should not appear in the books of a new firm and amount payable to Lodha is to be transferred to his Loan A/c Prepare : Profit AND Loss ADJUSTMENT A/c , PARTNERS CAPITAL ACCOUNTS, BALANCE sheet of new firm,

##### 11,500
 Dr                                                                                                                                    Partner Capital A/c                                                                                                                         Cr Particular Shah Lodha Dhole Particular Shah Lodha Dhole To Goodwill A/c 17,333 8,667 By Balance b/d 45,000 35,000 27,000 To Lodha Loan A/c 45260 By Goodwill A/c 10,400 7,800 7,800 To Balance C/d 41,347 28,593 By Profit & loss Adj A/c 3,280 2,460 2,460 58,680 45,260 37,260 58,680 45,260 37,260
 Balance sheet of New Firm as on 1st April 2019 Liabilities Amt Amt Asset Amt Amt Capital A/c Furniture 25,000 Shah 41,347 Add : Appreciation 2,500 27,500 Dhole 28,593 69,940 Computers 43,000 Sundry Creditors 20,000 Less : Depreciation @ 10% -4,300 38,700 Bills payable 4,000 Vehicles 45,000 Lodha’s Loan 45,260 Add : Appreciation @ 20% 9,000 54,000 Sundry Debtors 10,000 Cash 9,000 1,39,200 1,39,200 Dr                                                                                               Profit and Loss Adjustment Account                                                                                        Cr Particular Amt Amt Particular Amt Amt To Computer 4,300 By Furniture 2,500 By Vehicles 9,000 To Partner Capital A/c (Profit) By R.D.D 1,000 Shah A/c 3,280 Lodha A/c 2,460 Dhole A/c 2,460 8,200 11,500 11,500