On 31st March, 2025, the Balance Sheet of P, Q and R sharing profits and losses in proportion to their Capital stood as below: Liabilities ₹ Assets…

On 31st March, 2025, the Balance Sheet of P, Q and R sharing profits and losses in proportion to their Capital stood as below: Liabilities ₹ Assets ₹ Capital Account: Land and Building 75,000 Mr. P 50,000 Plant and Machinery 50,000 Mr. Q 75,000 Stock of goods 30,000 Mr. R 50,000 Sundry debtors 27,500 Sundry Creditors 25,000 Cash and Bank Balances 17,500 2,00,000 2,00,000 On 1st April, 2025, P desired to retire from the firm and remaining partners decided to carry on the business. It was agreed to revalue the assets and liabilities on that date on the following basis: (i) Land and Building be appreciated by 20%. (ii) Plant and Machinery be depreciated by 30%. (iii) Stock of goods to be valued at 25,000. (iv) Old credit balances of Sundry creditors, 5,000 to be written back. (v) Provisions for bad debts should be provided at 5%. (vi) Joint life policy of the partners surrendered and cash obtained - 18,875. (vii) Goodwill of the entire firm is valued at 35,000 and P’s share of the goodwill is adjusted in the A/cs of Q and R, who would share the future profits equally. No goodwill account being raised. (viii) The total capital of the firm is to be the same as before retirement. Individual capital is in their profit sharing ratio. (ix) Amount due to Mr. P is to be settled on the following basis:50% on retirement and the balance 50% within one year. Prepare (a) Revaluation account, (b) The Capital accounts of the partners, (c) Cash account and (d) Balance Sheet of the new firm M/s Q & R as on 1.04.2025.