Question

Radhika and Vijay were in Partnership Sharing profits & Losses in proportion of 3:2 respectively. Their Balance Sheet as on 31st March, 2020 stood as follows.

Balance Sheet as on 31st March, 2020
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital A/cs:			Premises	2,80,000
Radhika	2,00,000	3,20,000	Furniture and Fixture	22,800
Vijay	1,20,000		Stock	54,000
Current A/cs:			Debtors	18,200
Radhika	2,400	5,200	Cash at bank	2,200
Vijay	2,800
Loan from Omkar Balu		40,000
Creditors		12,000
		3,77,200		3,77,200

On 1st April, 2019 Omkar was admitted to the firm on the following terms:

1. Premises were to be valued at ₹ 3,40,000 and Furniture and Fixtures at ₹ 20,800. A provision for Bad debts on 2,000 was to be made. Stock should be revalued at ₹ 58,000.
2. Omkar Should bring in ₹ 80,000 as Capital and ₹ 20,000 as his share of goodwill and it was retained in the business and he should be given one-fourth share in the future profits.
3. The Loan from Omkar Balu was repaid through NEFT.

Prepare Revaluation Account, Partners Current Accounts and Balance sheet of the New firm.

Answer 1

Dr.	Revaluation Account			Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Furniture A/c		2,000	By Premises A/c	60,000
To RDD A/c		2,000	By Stock A/c	4,000
To Profit on Revaluation transferred to Capital A/c:
Radhika	36,000	60,000
Vijay	24,000
		64,000		64,000

 

Dr.	Partner's Capital Accounts				Cr.
Particulars	Radhika (₹)	Vijay (₹)	Particulars	Radhika (₹)	Vijay (₹)
To Balance c/d	50,400	34,800	By Balance b/d	2,400	2,800
			By Goodwill  A/c	12,000	8,000
			By Revaluation A/c (Profit)	36,000	24,000
	50,400	34,800		50,400	34,800

 

Balance Sheet of New Firm as on 1st April, 2020
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital Account:			Premises	2,80,000	3,40,000
Radhika	2,00,000	4,00,000	Add: Appreciation	60,000
Vijay	1,20,000		Furniture and Fixtures	22,800	20,800
Omkar	80,000		Less: Depreciation	2,000
Current A/c:			Stock	54,000	58,000
Radhika		50,400	Add: Appreciation	4,000
Vijay		34,800	Debtors	18,200	16,200
Creditors		12,000	Less: R.D.D	2,000
			Cash at bank		62,200
		4,97,200			4,97,200