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Q8. The post-closing trial balance of M/S. Shaheen Traders at 31 March 2020 is set out...

Q8.

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

:

Shaheen Traders

Post Closing Trial Balance

As on 31St March 2020

Particular

Debit

Credit

OMR

OMR

Cash at Bank

1,615

Sundry Debtors

17,761

Stock

24,219

Machinery

16,146

Equipment

42,787

Land & Building

32,292

Goodwill

16,146

Sundry Creditors

24,220

Bills Payable

4,844

Ajmal Capital

48,438

Azeem Capital

32,292

Kamran Capital

24,219

Profit and Loss Account

16,953

`

150,965  

150,965

On the above date, Ajmal retired, and the following arrangements were agreed upon:

  1. Goodwill of the firm is to be valued at OMR. 30,000.

  1. The assets and liabilities are to be valued as under: Stock OMR19,000, Sundry Debtors        OMR15,500, Land and Building OMR35,600, Equipment OMR38,000 and Machinery OMR       12,000 and Sundry Creditors OMR21,000.

  1. Azeem and Kamran were to introduce OMR23,000 and OMR8,000 respectively into the business and OMR18,200 was to be paid immediately and the balance transferred to his loan account.

  1. To bring into books unrecorded investments OMR 5,000

  1. Azeem and Kamran agreed not to retain goodwill in books.

  1. Ajmal, Azeem and Kamran 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 cum values in the new balance sheet.  

Solutions

Expert Solution

please find the journal Entries, Relvaluation Account, Capital Account, Bank Account and Financial Postion of the Firm after giving effects for all the arrangements as stated in the question.

ekkarill92 answered 2 years ago
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