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Question
Alfa and Beta are partners in a firm. Their Balance Sheet as at 31st March, 2024, is given below:
| Balance Sheet of Alfa and Beta As of 31st March, 2024 | ||||
| Liabilities | (₹) | (₹) | Assets | (₹) |
| Sundry Creditors | 1,16,000 | Cash at Bank | 93,600 | |
| Workmen’s Compensation Reserve | 24,000 | Sundry Debtors | 76,400 | |
| Capital Accounts: | 1,80,000 | Stock | 1,10,000 | |
| Alfa | 1,00,000 | Investment | 20.000 | |
| Beta | 80,000 | Goodwill | 20,000 | |
| 3,20,000 | 3,20,000 | |||
On 1st April, 2024, they admit Beta’s son Gama, as a partner on the following terms:
- Gama to have `1/4` share of profits, half of which is to be gifted to him by his father and the remaining half to be purchased from Alfa.
- Gama to bring in ₹ 60,000 as his capital but would be unable to bring in cash his share of goodwill.
- Goodwill of the firm to be valued at ₹ 40,000.
- 50% of the investment to be taken over by Alfa and Beta in their profit-sharing ratio.
- The liability on account of Workmen’s Compensation Claim to be ₹ 30,000.
You are required to:
- Calculate the new profit-sharing ratio of all the partners.
- Prepare the Partners’ Capital Accounts.
Solution
(i)
Gifted by Beta = `1/2 "of" 1/4 = 1/8`
Purchased from Alfa = `1/8`
New Ratio= Alfa = `1 - 1/8 = 7/8`
Beta = `1 - 1/8 = 7/8`
Gama = `1/4`
∴ New Ratio = 7 : 7 : 2
(ii)
| Partners’ Capital Accounts | |||||||
| Particulars | Alpha | Beta | Gama | Particulars | Alpha | Beta | Gama |
| To Goodwill | 10,000 | 10,000 | - | By Bal b/d | 1,00,000 | 80,000 | - |
| To Investment | 5,000 | 5,000 | - | By Cash/Bank | - | - | 60,000 |
| To Revaluation | 3,000 | 3,000 | - | By Gama’s Current A/c | 5,000 | - | - |
| To Bal c/d | 87,000 | 62,000 | 60,000 | ||||
| 1,05,000 | 80,000 | 60,000 | 1,05,000 | 80,000 | 60,000 | ||
Working notes:
Gama’s share of Goodwill = `1/8 "of" 40,000 = ₹ 5,000`
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| Balance Sheet of Amay and Sujoy As at 31st March, 2023 |
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