On 31st March, 2019, the Balance Sheet of A, B and C who were sharing profits and losses in proportion to their capitals stood as:

Liabilities Amount
(₹) Assets Amount
(₹)
Creditors 10,800 Cash at Bank 13,000
Bills Payable 5,000 Debtors 10,000
Capital A/cs: Less: Provision for Doubtful Debts 200 9,800
A 45,000 Stock 9,000
B 30,000 Machinery 24,000
C 15,000 90,000 Freehold Premises 50,000

1,05,800 1,05,800


B retired and following adjustments were agreed to determine the amount payable to B:
(a) Out of the amount of insurance premium debited to Profit and Loss Account, ₹ 1,000 be carried forward as prepaid Insurance.