Accountancy > Accounting For Partnership Firms > Retirement Of A Partner
(b) Ashish, Vinit and Reema were partners sharing profits and losses in the ratio of 2:2:1. Their Balance Sheet on 31st March, 2024 was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals: | Patents | 80,000 | |
| Ashish 2,00,000 | Furniture | 3,00,000 | |
| Vinit 2,00,000 | Stock | 1,70,000 | |
| Reema 1,00,000 | 5,00,000 | Debtors 80,000 | |
| General Reserve | 50,000 | Less: Prov 8,000 | 72,000 |
| Bills Payable | 80,000 | Cash | 48,000 |
| Creditors | 40,000 | ||
| Total | 6,70,000 | Total | 6,70,000 |
On the above date, Vinit retired on the following terms: (i) Goodwill of the firm was valued at ₹ 60,000 and the same was adjusted into the capital accounts of Ashish and Reema who will share profits in future in the ratio of 3:2. (ii) Value of stock was to be reduced by ₹ 10,000. (iii) Patents are found undervalued by 20%. (iv) Vinit was paid ₹ 20,000 immediately on retirement and the balance was transferred to his loan account carrying interest @ 8% p.a.
Pass necessary journal entries on Vinit's retirement.
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