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The post-closing trial balance of M/S. Sun Traders at 31 March 2020 is set out below...

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.

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ekkarill92 answered 1 year ago
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