Meghna, Mehak and Mandeep were partners in a firm whose Balance Sheet as on 31st March, 2023 was as under:
| Liabilities | ₹ | Assets | ₹ |
| Creditors | 28,000 | Cash | 27,000 |
| General Reserve | 7,500 | Debtors | 20,000 |
| Capitals: Meghna Mehak Mandeep |
20,000 14,500 10,000 |
Stock | 27,000 |
| Creditors | 28,000 | Cash | 28,000 |
| Furniture | 5,000 | ||
| 80,000 | 80,000 |
Mehak retired on this date under following terms:
- To reduce stock and furniture by 5% and 1% respectively.
- To provide for doubtful debts at 10% on debtors
- Goodwill was valued at ₹ 12,000.
- Creditors of ₹ 8,000 were settled at ₹ 7,100.
- Mehak should be paid off and the entire sum payable to Mehak shall be brought in by Meghna and Mandeep in such a way that their capitals should be in their new profit sharing ratio and a balance of ₹ 25,000 is maintained in the Cash Account.
Prepare Revaluation Account and Partner’s Capital Accounts of the new firm.
Solution :
