In: Accounting
The post-closing trial balance of M/S. Sun Traders at 31 March 2020
is set out below
Sun Tarders
Post Closing Trial Balance
As on 31St March 2020
Particular |
Debit |
Credit |
Cash at Bank |
1,000 |
|
Sundry Debtors |
11,000 |
|
Stock |
15,000 |
|
Motor Vehicle |
10,000 |
|
Profit and loss accounts |
3,000 |
|
Plant & Equipment |
26,500 |
|
Land & Building |
20,000 |
|
Goodwill |
10,000 |
|
Sundry Creditors |
15,000 |
|
Bills Payable |
6,000 |
|
General Reserve A/c |
10,500 |
|
Akbar, Capital |
30,000 |
|
Babar ,Capital |
20,000 |
|
Khan , Capital |
15,000 |
|
96,500 |
96,500 |
On the above date, Akbar retired, and the following arrangements
were agreed upon:
a. Goodwill of the firm is to be valued at OMR 24,000.
b. The assets and liabilities are to be valued as: Stock OMR
12,000, Sundry Debtors
OMR.10,500, Land and Building OMR 22,600, Plant and Machinery
OMR25,000 and
Sundry Creditors OMR 14,000.
c. To bring into books unrecorded investments OMR 1,000
d. Babar and Khan were to introduce OMR20,000 and OMR5,000
respectively into the business and OMR16,200 was to be paid
immediately and balance transfer to loan accounts.
e. Bills payable were unrecorded to the extent of OMR1,000
f. Babar and Khan agreed not to retain goodwill in books.
g. Akbar, Babar and Khan profit and loss sharing ratio are 4:2:1
respectively.
You are required to pass necessary Journal entries with proper
narrations to record the above transactions. Prepare revaluation
account, capital accounts, bank account and financial position of
the new firm as at 1st April 2020, after all above arrangement have
been completed. Write down the impact of retirement with
explanations values in the new balance sheet.