Reconstitution of Partnership

Vilas, Mangal, Guru were partners in a business sharing profits and losses in the ratio of 2:1:1 respectively. Their Balance sheet as on 31^st March, 2012 was as follows: 

          Balance Sheet as on 31st March 2012

Guru died on 1^st July, 2012

1) Land and Building was to be revalued to Rs 7,000 and RDD was to be created of Rs 200.

2) The drawings of Guru upto the date of his death amounted to Rs 1,000/-

3) Charge interest on drawings Rs 100/-

4) His share of goodwill should be calculated at ‘Three’ years purchase of the profits for the last four years which were Rs 15,000, Rs 13,000/-, Rs 7,000, Rs 5,000

5) The deceased partners share of profit upto the date of his death to be calculated on the basis of average profit of last two years.

Prepare:

1) Profit and Loss Adjustment A/c

2) Partners Capital A/cs

3) Balance Sheet of the continuing firm

4) Give working or share of profit and goodwill

State True or False with reason.

Change in the relationship between the partners is called the Reconstitution of partnership.

The Balance sheet of Mohan, Subhash and Babi as on 31^st December, 2011 was as under. They were sharing profits and losses in the ratio of 2:1:1.

            Balance Sheet as on 31^st December,2011

Babi died on 1^st July, 2012 and partnership deed provided that in the event of death of the partner his executor will be entitled to be paid out.

1) Capital to the credit at the date of last balance sheet

2) Proportion of reserves

3) Proportion of goodwill to be calculated twice the average profits of last three years.

4) His proportion of profits to the date of death based on the average profits of the last three year plus 20%.

5) The net profits for last 3 years Rs 18,000, Rs 18,000, Rs 16,500.

6) Babi had withdrawn Rs 6,000/- to the date of her death.

7) The investments were sold at par and the amount was paid off to Babi’s executor and the balance was transferred to loan A/c.

Prepare: 
1) Babi’s Capital A/c only.

Find the odd one:

Akash and Suraj are partners in a firm sharing profits and losses in the ratio 3 : 2. Their balance sheet as on 31st March, 2013 was as follows:

                       Balance Sheet as on 31st March, 2013

They agreed to admit Sanjay in their partnership on 1st April, 2013, on the following terms :

1. Sanjay should bring Rs. 1,500, as his share of goodwill in the firm, and Rs. 2,000 as his capital.
2. Reserve for doubtful debts is to be provided @ 5% on debtors.
3. Land and building be depreciated at 10% p. a.
4. Plant and machinery to be depreciated @ 5% and stock to be depreciated @ 10% p. a.
5. The new profit sharing ratio will be 2: 1: 1.

Prepare :

1. Revaluation Account.
2. Partners’ Capital Accounts.
3. New Balance Sheet of the firm.

Shailesh, Anil and Das were partners sharing profits and losses in the ratio at 3:3:2. Their Balance Sheet as on 31.3.2012 is as below:

             Balance Sheet as on 31^st March, 2012

In 1^st April, 2012 Mr. Das retired from the firm on following terms:

1) Shailesh and Anil’s share in reserve fund should be continued in new firm.

2) Goodwill of the firm is to be valued at Rs 4,000 however only Das’s share in it is to be raised in the books and written off immediately

3) Assets to be revalued as under stock Rs 6,300 machinery Rs 10,000 furniture Rs 10,200

4) R.D.D. to be maintained at 10% on debtors

5) Rs 100 to be written off from creditors

6) The amount payable to Mr. Das is to be transferred to his loan account

Prepare:- Profit and Loss adjustment A/c, Partners capital A/c and Balance Sheet of New firm on 1/04/2012

Vishnu, Prabhakar and Krishna were partners in a business sharing profits and losses in the ratio of 3:1:1 respectively. Their Balance Sheet as on 31^st March, 2012 was as follows:

         Balance Sheet as on 31^st March, 2012

Krishna died on 1^st October, 2012 and the partnership deed provided that:

1) The deceased partner to be given his share of profit to the date of death on the basis of the profits of the previous year.

2) His share of goodwill will be calculated on two years purchase of average profit of the last 4 years. The net profit for last 4 years were Rs 70,000, Rs 55,000, Rs 45,000, Rs 30,000

3) Plant and Machinery to be valued at Rs 40,000. Reserve for doubtful debts of Rs 2,000 to be created.

4) The drawings of Krishna upto the death amounted to Rs 20,000

5) Interest on capital at 10% p.a. is to be allowed and 6% p.a. to be charged on drawings. Both the interest should be calculated for 6 months. 
Prepare:
1) Krishna’s capital A/c and P/L Adjustment A/c