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Death of a Partner 5.13
Profits of preceding five years ending 31st March, were: 2014—` 28,750; 2015—` 35,000;
2016—` 22,500; 2017—` 20,000 and 2018—` 25,000.
You are required to show Revaluation Account, Partners’ Capital Accounts and Balance
Sheet of the new firm as at 30th June, 2018.

Solution:
Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `

To Stock A/c 1,500 By Land and Building A/c 25,000
To Gain (Profit) on Revaluation transferred to: By Provision for Doubtful Debts A/c 2,000
Mandeep’s Capital A/c 8,500
Randeep’s Capital A/c 8,500
Sandeep’s Capital A/c 8,500 25,500
27,000 27,000

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.

Particulars Mandeep Randeep Sandeep Particulars Mandeep Randeep Sandeep
` ` ` ` ` `
To Goodwill A/c (WN 2) 15,750 15,750 15,750 By Balance b/d 75,000 50,000 50,000
To Sandeep’s Capital A/c 4,375 4,375 ... By Revaluation A/c 8,500 8,500 8,500
(WN 2) (Gain or Profit)
To Sandeep’s By Investments Fluctua-
Executor’s A/c ... ... 56,925 tion Reserve (WN 1) 550 550 550
To Balance c/d 66,925 41,925 ... By General Reserve A/c 3,000 3,000 3,000
By Mandeep’s Capital A/c ... ... 4,375
(WN 2)
By Randeep’s Capital A/c ... ... 4,375
(WN 2)
By Profit and Loss
Suspense A/c (WN 3) ... ... 1,875
87,050 62,050 72,675 87,050 62,050 72,675

BALANCE SHEET OF MANDEEP AND RANDEEP
as at 30th June, 2018
Liabilities ` Assets `
Creditors 33,250 Cash 2,500
Investments Fluctuation Reserve 1,350 Bank 10,000
Sandeep’s Executor’s A/c 56,925 Debtors 25,000
Capital A/cs: Stock 23,500
Mandeep 66,925 Land and Building 1,25,000
Randeep 41,925 1,08,850 Investments (At Cost) 12,500
Profit and Loss Suspense A/c 1,875
2,00,375 2,00,375