Advertisements
Advertisements
Question
Chander and Damini were partners in a firm sharing profits and losses equally. On 31st March 2017 their Balance Sheet was as follows:
|
Balance Sheet of Chander and Damini as on 31.3.2017 |
|||
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Sundry Creditors Capitals: Chander 2,50,000 Damini 2,16,000
|
1,04,000
4,66,000
|
Cash at Bank Bills Receivable Debtors Furniture Land and Building
|
30,000
75,000 1,10,000 3,10,000 |
| 5,70,000 | 5,70,000 | ||
On 1.4.2017, they admitted Elina as a new partner for `1/3` rd share in the profits on the following conditions:
1) Elina will bring Rs 3,00,000 as her capital and Rs 50,000 as her share of goodwill premium, half of which will be withdrawn by Chander and Damini.
2) Debtors to the extent of Rs 5,000 were unrecorded.
3) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be created on bills receivables and debtors.
4) Value of land and building will be appreciated by 20%.
5) There is a claim against the firm for damages, a liability to the extern of Rs 8,000 will be created for the same.
Prepare Revaluation Account and Partners Capital Accounts.
Solution
| In the books of Chander & Damini Revaluation Account |
| Dr | Cr | ||
| Particulars | Rs | Particulars | Rs |
|
To Furniture To Provision for bad & Doubtful Debts To Claim for Damages To Profit transferred to: Chander’s Capital 20,875 Damini’s Capital 20,875________ |
11,000 6,250
8,000
41,750 |
By Debtors By Land and Building
|
5,000 62,000
|
| 67,000 | 67,000 |
| In the books of Chander, Damini & Elina Partner’s Capital Account |
|||||||
| Dr. | Cr. | ||||||
| Particulars | Chander | Damini | Elina | Particulars | Chander | Damini | Elina |
|
To Bank A/c To Balance c/d
|
12,500 2,83,375
|
12,500 2,49,375
|
3,00,000
|
By Balance b/d By Bank A/c By Premium for Goodwill A/c By Revaluation A/c |
2,50,000
25,000 20,875 |
2,16,000
25,000 20,875 |
3,00,000
|
| 2,95,875 | 2,61,875 | 3,00,000 | 2,95,875 | 2,61,875 | 3,00,000 | ||
APPEARS IN
RELATED QUESTIONS
Mohan and Mahesh were partners in a firm sharing profit in the ratio 3:2. On 1st April 2012, they admitted Nusrat as a partner in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under:
Balance Sheet of Mohan and Mahesh as on 1st April 2012
| Liabilities | Amount(Rs.) | Assets | Amount(Rs.) |
|
Creditors Workman’s Compensation Fund General Reserve Capital: Mohan 1,00,000 Mahesh 80,000
|
2,10,000 2,50,000 1,60,000
1,80,000
|
Cash in hand Debtors Stock Machinery Building
|
1,40,000 1,60,000 1,20,000 1,00,000 2,80,000
|
| 8,00,000 | 8,00,000 |
It was agreed that:
i. The value of Building and Stock be appreciated to Rs.3,80,000 and Rs.1,60,000 respectively.
ii. The liabilities of workmen's compensation fund was determined at Rs.2,30,000.
iii. Nusrat brought in her share of goodwill Rs.1,00,000 in cash.
iv. Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustments are carried out.
v. The future profit sharing ratio will be Mohan 2/5, Mahesh 2/5, Nusrat 1/5.
Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. Also show clearly the calculation of Capital brought by Nusrat.
Nardeep, Hardeep and Gagandeep were partners in a firm sharing profits in 2:1:3 ratio. Their Balance Sheet as on 31.3.2015 was as follows
Balance Sheet of Nardeep,Hardeep and Gagandeep as on 31-3-2015
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors Bills Payable General Reserve Capitals Nardeep 2,00,000 Hardeep 1,00,000 Gagandeep 50,000 |
1,00,000 40,000 60,000
3,50,000 |
Land Building Plant Stock Debtors Bank
|
1,00,000 1,00,000 2,00,000 80,000 60,000 10,000
|
| 5,50,000 | 5,50,000 |
From 1-4-2015 Nardeep, Hardeep and Gagandeep decided to share the future profits equally. For this purpose it was decided that
(a) Goodwill of the firm be valued at Rs 3, 00,000.
(b) Land be revalued at Rs 1, 60,000 and building be depreciated by 6%.
(c) Creditors of Rs 12,000 were not likely to be claimed and hence be written off.
Prepare, Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
A, B and C were partners in a firm sharing profit in the ratio of 3:2:1. On 31-3-2015 their Balance sheet was as follows :
Balance Sheet of A,B and C as on 31-3-2015
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors Bills Payable
Capitals A 1,00,000 B 50,000 C 25,000 General Reserve |
50,000 20,000
1,75,000 30,000 |
Land Building Plant Stock Debtors Bank
|
50,000 50,000 1,00,000 40,000 30,000 5,000
|
| 2,75,000 | 2,75,000 |
On the above date D was admitted as new partner and it was decided that:
(i) Goodwill of the firm will be valued at 1,50,000
(ii) Land will be revalued at 80,000 and building be depreciated by 60%.
(iii) Creditors of 6,000 were not likely to be claimed and hence should be written off
Prepare Revaluations Account, Partner’s Capital Accounts and Balance Sheet of the reconstitute firm.
Kapil, Mohit, Roshan and Rakesh were partners in firm sharing profits in the ratio of 5:2:2:1. On 1.4.2016 their Balance Sheet was as follows :
| Balance Sheet of Kapil, Mohit, Roshan and Rakesh as on 1.4.2016 |
|||
| Liabilities | Rs | Assets | Rs |
|
Capitals : Kapil 3,50,000 Mohit 3,00,000 Roshan 2,50,000 Rakesh 2,00,000 Sundry Creditors Workmen Compensation Reserve |
11,00,000 50,000 50,000 |
Fixed Assets Current Assets
|
8,00,000 4,00,000
|
| 12,00,000 | 12,00,000 | ||
From the above date, the partners decided to share the future profits equally. For this purpose, the goodwill of the firm was valued at Rs 72,000. It was also agreed that:
1) Fixed assets will be depreciated by 10% and the claim against Workmen Compensation Reserve will be estimated at Rs 70,000.
2) The Capitals of the partners will be adjusted according to their new profit sharing ratio. For this, Partners' Current Accounts will be opened
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.
Om, Ram and Shanti were partners in a firm sharing profits in the ratio of 3:2:1. On 1st April 2014 their Balance Sheet was as follows:
| Balance Sheet | |||
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Capital Accounts Om 3,58,000 Ram 3,00,000 Shanti 2,62,000 General Reserve Creditors Bills payable |
9,20,000 48,000 1,60,000 90,000 |
Land and Building Plant and Machinery Furniture Bills Receivables Sundry Debtors Stock Bank |
3,64,000 2,95,000 2,33,000 38,000 90,000 1,11,000 87,000 |
| 12,18,000 | 12,18,000 | ||
On the above date Hanuman was admitted on the following terms:
1) He will bring Rs 1,00,000 for his capital and will get the 1/10th share in the profits.
2) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was valued at Rs 3,00,000
3) A liability of Rs 18,000 will be created against bills receivables discount
4) The value of stock and furniture will be reduced by 20%.
]5) The value of land and building will be increased by 10%.
6) Capital accounts of the partners will be adjusted on the basis of Hanuman's capital in their profit sharing ratio by opening current accounts.
Prepare Revaluation Account and Partner's Capital Accounts.
Xavier, Yusuf and Zaman were partners in a firm sharing profits in the ratio of 4:3: 2. On 1.4.2014 their Balance sheet was as follows:
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Sundry Creditors Capital Accounts Xavier 1,20,000 Yusuf 90,000 Zaman 60,000
|
41,400
2,70,000
|
Cash at Bank Sundry Debtors 30,450 Less: Prov. For Bad debts 1,050 Stock Plant and Machinery Land and Building |
33,000
29,400 48,000 51,000 1,50,000 |
| 3,11,400 | 3,11,400 |
Yusuf had been suffering from ill health and thus gave notice of retirement from the firm. An agreement was, therefore, entered into as on 1.4.2014, the terms of which were as follows:
1) That land and building be appreciated by 10%
2) The provision for bad debts is no longer necessary
3) That stock be appreciated by 20%
4) That goodwill of the firm be fixed at Rs 54,000. Yusuf share of the same be adjusted into Xavier's and Zamna's Capital Accounts, who are going to share future profits in the ratio of 2:1
5) The entire capital of the newly constituted firm be readjusted by bringing in or paying necessary cash so that the future capitals of Xavier and Zaman will be in their profit sharing ratio.
Prepare Revaluation Account and Partner's Capital Account
X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :
(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.
(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.
(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.
The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:
(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.
(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.
The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below :
|
Dr. |
Z’s Capital Account |
Cr. |
|||
|
Date |
Particulars |
Amount (Rs) |
Date |
Particulars |
Amount (Rs) |
|
2016 |
|
|
2016 |
|
|
|
Sep. 30 |
…………… |
30,000 |
April 1 |
…………… |
80,000 |
|
Sep. 30 |
…………… |
2,000 |
Sep. 30 |
…………… |
4,800 |
|
Sep. 30 |
…………… |
……... |
Sep. 30 |
…………… |
20,000 |
|
|
|
|
Sep. 30 |
…………… |
……... |
|
|
|
|
Sep. 30 |
…………… |
……... |
|
|
|
1,64,800 |
|
|
1,64,800 |
|
|
|
|
|
|
|
You are required to complete Z's Capital Account.
A and Z are partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet as on 31.3.2016 was as follows was as follows:
|
Balance Sheet of A and Z as on 31.3.2016 |
||||
|
Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
|
|
Sundry Creditors |
60,000 |
Cash |
36,000 | |
|
Provision for Bad Debts |
6,000 |
Debtors |
54,000 | |
|
Outstanding Wages |
9,000 |
Stock |
60,000 | |
|
General Reserve |
15,000 |
Furniture |
1,20,000 | |
|
|
|
Plant & Machinery |
120,000 | |
|
Capitals: |
|
|
||
|
A |
1,20,000 |
|
|
|
|
Z |
1,80,000 |
3,00,000 |
|
|
|
|
3,90,000 |
|
3,90,000 |
|
|
|
|
|
||
On the above date B was admitted for `1/4` share in the profits on the following terms:
(i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be withdrawn by A and Z.
(ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful debts.
(iii) Outstanding wages will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%.
Pass necessary journal entries for the above transactions in the books of the firm on B’s admission.
N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under:
P, Q and R were partners in a firm sharing profit in the ratio of 7 : 2: 1. On 1st April, 2013 their Balance Sheet was as follows:
|
Balance Sheet of P, Q and R as on 1st April, 2013 |
|||||
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
Capitals: |
|
Land |
12,00,000 |
||
|
P |
9,00,000 |
|
Building |
9,00,000 |
|
|
Q |
8,40,000 |
|
Furniture |
3,60,000 |
|
|
R |
9,00,000 |
26,40,000 |
Stock |
6,60,000 |
|
|
General Reserve |
3,60,000 |
Debtors |
6,00,000 |
|
|
|
Workmen’s Compensation Fund |
5,40,000 |
Less provision |
–30,000 |
5,70,000 |
|
|
Creditors |
3,60,000 |
Cash |
2,10,000 |
||
|
|
39,00,000 |
|
39,00,000 |
||
|
|
|
|
|||
On the above data Q retired.
The following were agreed:
(i) Goodwill of the firm was valued at Rs 12,00,000.
(ii) Land was to be appreciated by 30% and Building was to depreciated by 3,00,000.
(iii) Value of furniture was to be reduced by Rs 60,000.
(iv) The liabilities for Workmen's Compensation Fund were determined at Rs 1,40,000.
(v) Amount Payable to Q was transferred to his loan account.
(vi) Capitals of P and R were to be adjusted in their new profit sharing ratio, For this purpose current accounts of the partners will be opened.
Prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm.
From the following items of Receipts and Payments A/c of South India Club, prepare an Income and Expenditure Account for the year ended 31.3.2010:
|
Particulars |
Rs |
|
Salaries Paid |
55,000 |
|
Lighting expenses |
5,500 |
|
Stationery (Including Rs 400 for the previous year) |
4,000 |
|
Subscription received (including 1,000 received in advance |
44,000 |
|
and Rs 750 for the previous year) |
|
|
Net Proceeds of Refreshment Room |
30,000 |
|
Miscellaneous Expenses |
3,000 |
|
Interest paid on loan for three months |
1,200 |
|
Rent and Rates (Including Rs 500 pre-paid) |
4,500 |
|
Lockers Rent received |
Additional Information:
Subscriptions in arrears on 31.3.2010 were Rs 4,700 and nine months interest on loan was also outstanding.
From the following Receipts and Payments Account of Kolkata Sports Club for the year ended
31.3.2011, prepare Income and Expenditure Account.
|
Receipts and Payments Account of Kolkat Sports Club for the year ended 31.3.2011 |
|||
|
Dr. |
|
|
Cr. |
|
Receipts |
Amount Rs |
Payments |
Amount Rs |
|
To Balance b/d |
3,200 |
By Salary |
1,800 |
|
To Subscription |
22,500 |
By Rent (paid on 30.9.2010 for 12 months) |
2,300 |
|
To Entrance Fees (including Rs 1,000 as capital income) |
3,000 |
By Electricity |
1,000 |
|
To Donations |
750 |
By Taxes |
2,200 |
|
To Rent of hall |
1,750 |
By Printing and Stationery |
400 |
|
To Accrued interest for the year 2009 – 2010 |
2,000 |
By Sundry Expenses |
900 |
|
|
|
By Books |
7,500 |
|
|
|
By 9% Fixed Deposit (on 1.4.2010) |
15,200 |
|
|
|
By Balance c/d |
1,900 |
|
|
33,200 |
|
33,200 |
|
|
|
|
|
Khanna, Seth and Mehta were partners in a firm sharing profit in the ratio of 3 : 2 : 5. On
31.12.2010 the Balance Sheet of Khana, Seth and Mehta was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
|
Capitals: |
|
Goodwill |
3,00,000 |
|
|
Khanna: |
3,00,000 |
|
Land and Building |
5,00,000 |
|
Seth: |
2,00,000 |
|
Machinery |
1,70,000 |
|
Mehta: |
5,00,000 |
10,00,000 |
Stock |
30,000 |
|
General Reserve |
1,00,0000 |
Debtors |
1,20,000 |
|
|
Loan from Seth |
50,000 |
Cash |
45,000 |
|
|
Creditors |
75,000 |
Profit and Loss Account |
60,000 |
|
|
|
12,25,000 |
|
||
On 14th March 2011, Seth died.
The partnership deed provides that on the death of a partner the executor of the deceased partners
is entitled to:
(i) Balance in Capital Account;
(ii) Share in profits upto the date of death on the basis of last year’s profit;
(ii) His share in profit/loss in revaluation of assets and re-assessment of liabilities which were as follows:
(a) Land and Building was to be appreciated by Rs 1,20,000;
(b) Machinery was to be depreciated to Rs 1,35,000 and stock to Rs 25,000;
(c) A provision of `2 1/2%` for bad and doubtful debts was to created on debtors;
(iv) The net amount payable to Seth’s executors was transferred to his loan account which was to be paid later.
Prepare Revalution Account, Partners Capital Accounts, Seth’s Executors Account and the
Balance Sheet of Khanna and Mehta who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus of deficit to be transferred the current account of the partners.
A, B and C were partners sharing profits in the ratio of 3 : 1 : 1. Their Balance-Sheet as on March 31st 2009, the date on which they dissolve their firm, was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
Capitals: |
|
Sundry Assets |
17,000 |
||
|
A |
27,500 |
|
Stock |
7,800 |
|
|
B |
10,000 |
|
Debtors |
24,200 |
|
|
C |
7,000 |
44,500 |
Less: Provision for doubtful debts |
1,200 |
23,000 |
|
Loan |
1,500 |
Bills Receivable |
1,000 |
||
|
Creditors |
6,000 |
Cash |
3,200 |
||
|
|
52,000 |
|
52,000 |
||
|
|
|
|
|||
It was agreed that:
(a) A to take over Bills Receivable at Rs 800, debtors amounting to Rs 20,000 at 17,200 and the creditors of Rs 6,000 were to be paid by him at this figure.
(b) B is to take over all stock for Rs 7,000 and some sundry assets at Rs 7,200 (being 10% less than the book value)
(c) C to take over remaining sundry assets at 90% of the book value and assume the responsibility of discharge of loan together with accrued interest of Rs 300.
(d) The expenses of realization were Rs 270
The remaining debtors were sold to a debt collecting agency at 50% of the book value. Prepare Realisation A/c, Partners Capital A/c and Cash A/c
The Balance Sheet of Ram and Shyam, who were sharing profits in the ratio of 3 : 1 on 31st March, 2009 was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
Creditors |
2,800 |
Cash at bank |
2,000 |
||
|
Employees’ provident fund |
1,200 |
Debtors |
6,500 |
|
|
|
General Reserve |
2,000 |
Less: Reserve for bad debts |
(500) |
6,000 |
|
|
Capitals |
|
Stock |
3,000 |
||
|
Ram |
6,000 |
|
Investments |
5,000 |
|
|
Shyam |
4,000 |
10,000 |
|
|
|
|
|
16,000 |
|
16,000 |
||
|
|
|
|
|||
Annie and Bonnie are partners in a firm, sharing profits and losses equally. Their Balance Sheet as at 31st March,
2017, was as follows:
Balance Sheet of Annie and Bonnie
As at 31st March, 2017
| Liabilities | Amount Rs. | Assets | AmountRs. |
| Sundry Creditors | 21,000 | Cash at Bank | 20,000 |
| General Reserve | 15,000 |
Sundry Debtors 22,000 Less Provision for Doubtful Debts (1,000) |
21,000 |
|
Capital A/c Annie 45,000 Bonnie40,000 |
85,000 |
Stock | 10,000 |
| Plant & Machinery | 60,000 | ||
| Goodwill | 10,000 | ||
| 1,21,000 | 1,21,000 |
Carl was to be taken as a partner for 1/4 share in the profits of the firm, with effect from 1st April, 2017, on the
following terms:
(a) Bad debts amounting to Rs. 1,500 to be written off.
(b) Stock to be taken over by Annie at Rs.12,000.
(c) Plant and Machinery to be valued at Rs. 50,000.
(d) Goodwill of the firm to be valued at Rs. 20,000.
(e) Carl to bring in Rs. 50,000 as his capital. He was unable to bring his share of goodwill in cash.
(f) General Reserve not to be distributed. For this, it was decided that Carl would compensate the old partners
through his current account.
You are required to:
(i) Pass journal entries on the date of Carl's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm
Susan, Geeta and Rashi are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2017, is as under:
Balance Sheet of Susan, Geeta and Rashi As at 31st March, 2017
| Liabilities | Amount | Assets | Amount |
| Sundry Creditors | 50,000 | Cash at Bank | 70,000 |
| Workmen Compensation Reserve | 25,000 |
Sundry Debtor 65,000 Less Provision for Doubtful Debts (5,000 |
60,000 |
| Employees Provident Fund | 5,000 | Goodwill | 50,000 |
| Bank Loan | 55,000 | Furniture | 1,00,000 |
|
Capital A/C Susan 2,20,000 Geeta 1,70,000 Rashi 1,35,000 |
5,25,000 |
Building | 3,80,000 |
| 6,60,000 | 6,60,000 |
The partners decided to dissolve their partnership on 31st March, 2017. The following transactions took place at the time of dissolution :
(a) Realization expenses of 2,000 were paid by Susan on behalf of the firm.
(b) Geeta took over the goodwill for her own business at 40,000.
(c) Building was taken over by Rashi at 3,00,000.
(d) Only 80% of the debtors paid their dues.
(e) Furniture was sold for 97,000.
(f) Bank Loan was settled along with interest of 5,000. You are required to prepare the Realization Account.
Gita, Radha, and Garv were partners in firm sharing profits and losses in the ratio of 3: 5: 2. On 31st March 2019, their balance sheet was as follows:
Balance Sheet of Gita, Radha & Garv as on 31st March 2019
| Liabilities |
Amount (₹) |
Assets | Amount (₹) |
| Sundry Creditors |
60,000 |
Cash | 50,000 |
| General Reserve |
40,000 |
Stock | 80,000 |
| Capitals : |
|
Debtors | 40,000 |
| Gita - 3,00,000 |
|
Investments | 30,000 |
| Radha - 2,00,000 |
|
Buildings | 5,00,000 |
| Garv - 1,00,000 |
6,00,000 |
||
| 7,00,000 | 7,00,000 |
Radha retired on the above date and it was agreed that:
(a) Goodwill of the firm be valued at ₹ 3,00,000 and Radha's share be adjusted through the capital accounts of Gita and Gary.
(b) Stock was to be appreciated by 20%.
(c) Buildings were found undervalued by ₹ 1,00,000.
(d) Investments were sold for ₹ 34,000.
(e) Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the partners; the necessary adjustments for this purpose were to be made by opening current accounts of the partners.
Prepare Revaluation Account, Partner's Capital Accounts, and the Balance Sheet of the reconstituted firm on Radha's retirement.
Akul, Bakul, and Chandan were partners in a firm sharing profits in the ratio of 2 : 2: 1. On 31st March 2018 their Balance Sheet was as follows:
Balance Sheet of Akul, Bakul and Chandan as on 31.3.2018
| Liabilities |
Amount (₹) |
Assets | Amount (₹) |
| Sundry Creditors | 45,000 | Cash at Bank | 42,000 |
| Employees Provident Fund | 13,000 | Debtors 60,000 | |
| General Reserve | 20,000 | Less: Provision for doubtful debts 2000 | 58,000 |
| Capitals: | |||
| Akul 1,60,000 | Stock | 80,000 | |
| Bakul 1,20,000 | Furniture | 90,000 | |
| Chandan 92,000 | 3,72,000 | Plant and Machinery | 1,80,000 |
| 4,50,000 | 4,50,000 |
Bakul retired on the above date and it was agreed that:
(i) Plant and Machinery were undervalued by 10%.
(ii) Provision for doubtful debts was to be increased to 15% on debtors.
(iii) Furniture was to be decreased to ₹ 87,000.
(iv) Goodwill of the firm was valued at ₹ 3,00,000 and Bakul's share was to be adjusted through the capital accounts of Akul and Chandan.
(v) Capital of the new firm was to be in the new profit sharing ratio of the continuing partners.
Prepare Revaluation account, Partners' Capital accounts, and the Balance Sheet of the reconstituted firm.
X and Y were partners in the profit-sharing ratio of 3 : 2. Their balance sheet as at March 31, 2022 was as follows:
| Balance Sheet as at March 31, 2022 | |||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | ||
| Creditors | 56,000 | Plant and Machinery | 70,000 | ||
| General Reserve | 14,000 | Buildings | 98,000 | ||
| Capital Accounts: | Stock | 21,000 | |||
| X | 1,19,000 | 2,31,000 | Debtors | 42,000 | 35,000 |
| Y | 1,12,000 | (-) Provision | 7,000 | ||
| Cash in Hand | 77,000 | ||||
| 3,01,000 | 3,01,000 | ||||
Z was admitted for 1/6th share on the following terms:
- Z will bring ₹ 56,000 as his share of capital but was not able to bring any amount to compensate the sacrificing partners.
- Goodwill of the firm is valued at ₹. 84,000.
- Plant and Machinery were found to be undervalued by ₹ 14,000 Building was to be brought up to ₹ 1,09,000.
- All debtors are good.
- Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current accounts.
You are required to prepare revaluation account and partners’ capital account.
