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Question
Write the Word/Term/Phrase which can substitute of the following statement:
Partner’s Account where Loss or Profit on revaluation is transferred.
Solution
Capital/Current Account.
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Following is the Balance Sheet of R.S. Ltd. as at 31st March, 2016 :
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R.S. Ltd. Balance Sheet as at 31-3-2016 |
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Particulars |
NoteNo. |
31-03-2016 (Rs) |
31-03-2015 (Rs) |
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I. Equity and Liabilities : (1) Shareholder's Funds |
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(a) Share Capital |
9,00,000 |
7,00,000 |
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(b) Reserves and Surplus |
1 |
2,50,000 |
1,00,000 |
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(2) Non-current Liabilities |
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Long-term borrowings |
2 |
4,50,000 |
3,50,000 |
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(3) Current Liabilities |
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(a) Short-term borrowings |
3 |
1,50,000 |
75,000 |
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(b) Short-term provisions |
4 |
2,00,000 |
1,25,000 |
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Total |
19,50,000 |
13,50,000 |
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II. Assets |
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(1) Non-current Assets |
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(a) Fixed Assets |
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(i) Tangible |
5 |
14,65,000 |
9,15,000 |
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(ii) Intangible |
6 |
1,00,000 |
1,50,000 |
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(b) Non-current Investments |
1,50,000 |
1,00,000 |
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(2) Current Assets |
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(a) Current Investments |
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40,000 |
70,000 |
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(b) Inventories |
7 |
1,22,000 |
72,000 |
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(c) Cash and Cash Equivalents |
73,000 |
43,000 |
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Total |
19,50,000 |
13,50,000 |
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Note No. |
Particulars |
31-03-2016 (Rs) |
31-03-2015 (Rs) |
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(1) |
Reserves and Surplus |
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(Surplus i.e. Balance in Statement of Profit and Loss) |
2,50,000 |
1,00,000 |
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2,50,000 |
1,00,000 |
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(2) |
Long-term borrowings |
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12% Debentures |
4,50,000 |
3,50,000 |
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4,50,000 |
3,50,000 |
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(3) |
Short-term borrowings |
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Bank overdraft |
1,50,000 |
75,000 |
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1,50,000 |
75,000 |
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(4) |
Short-term provisions |
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Proposed Dividend |
2,00,000 |
1,25,000 |
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2,00,000 |
1,25,000 |
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(5) |
Tangible Assets |
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Machinery |
16,75,000 |
10,55,000 |
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Accumulated Depreciation |
(2,10,000) |
(1,40,000) |
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14,65,000 |
9,15,000 |
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(6) |
Intangible Assets |
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Goodwill |
1,00,000 |
1,50,000 |
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1,00,000 |
1,50,000 |
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(7) |
Inventories |
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Stock in trade |
1,22,000 |
72,000 |
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1,22,000 |
72,000 |
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Additional Information :
(1) Rs 1,00,000, 12% Debentures were issued on 31-3-2016.
(2) During the year a piece of machinery costing Rs 80,000 on which accumulated depreciation was Rs 40,000 was sold at a loss of Rs 10,000.
Prepare a Cash Flow Statement.
At the time of admission of a partner C, assets and liabilities of A and B were revalued as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry Debtors ₹ 50,000).
(b) Creditors were written back by ₹ 5,000.
(c) Building was appreciated by 20% (Book Value of Building ₹ 2,00,000).
(d) Unrecorded Investments were valued at ₹ 15,000.
(e) A Provision of ₹ 2,000 was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was ₹ 3,000.
Pass necessary Journal entries.
Rohan, Rohit, and Sachin are partners in a firm sharing profit and losses in the proportion 3:1:1 respectively. Their balance sheet as on 31st March 2018 is as shown below
| Balance Sheet as on 31st March 2018 | |||||
| Liabilities | Amount ₹ | Assets | Amount ₹ | ||
| Creditors | 40,000 | Bank | 12,500 | ||
| General Reserve | 50,000 | Debtors | 60,000 | ||
| Bills payable | 25,000 | Live Stock | 50,000 | ||
| Capital Accounts : | Building | 75,000 | |||
| Rohan | 1,25,000 | Plant and Machinery | 35,000 | ||
| Rohit | 1,00,000 | Motor Truck | 1,00,000 | ||
| Sachin | 50,000 | Goodwill | 57,500 | ||
| 3,90,000 | 3,90,000 | ||||
On 1st April 2018, Sachin retired and the following adjustments have been agreed upon.
1. Goodwill was revalued at ₹ 50,000
2. Assets and Liabilities were revalued as follows. Debtors ₹ 50,000, Live Stock, ₹ 45,000; Building ₹ 1,25000, Plant and Machinery ₹ 30,000, Motor Truck ₹ 95,000 and Creditors ₹ 30,000
3. Rohan and Rohit contributed additional capital through Net Banking of ₹ 50,000 and ₹ 25,000 respectively.
4. Balance of Sachin’s Capital Account is transferred to his Loan Account
Give Journal entries in the books of new firm.
Excess of the credit side over the debit side of the revaluation account.
Balance sheet prepared after new partnership agreement, assets and liabilities are recorded at:
In case of admission of a partner, the entry for unrecorded investments will be:
A decrease in the value of liability will be recorded on the ____________ side of the revaluation account.
An increase in the value of liability will be recorded on the ____________ side of the revaluation account.
At the time of admission of a new partner, general reserve appearing in the old Balance Sheet is transferred to:
State the ‘true’ statement:
Assets and Liabilities are shown at their revalued values in:
Angle and Circle ware partners in a firm. Their Balance Sheet showed Furniture at ₹2,00,000; Stock at ₹1,40,000; Debtors at ₹1,62,000 and Creditors at ₹60,000. Square was admitted and new profit-sharing ratio was agreed at 2:3:5. Stock was revalued at ₹1,00,000, Creditors of ₹15,000 are not likely to be claimed, Debtors for ₹2,000 have become irrecoverable and Provision for doubtful debts to be provided @10%.
Angle’s share in loss on revaluation amounted to ₹30,000. Revalued value of Furniture will be?
Assertion (A): Revaluation A/c is prepared at the time of Admission of a partner.
Reason (R): It is required to adjust the values of assets and liabilities at the time of admission of a partner, so that the true financial position of the firm is reflected.
Revaluation account is also called ______ account.
Ajay, Vijay and Sanjay were partners sharing profits and losses in the ratio of 3 : 3 : 2. Their Balance Sheet as on 31st March 2020 is as follows:
| Balance Sheet as on 31st March, 2020 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | 32,700 | Bank | 19,800 |
| Reserve Fund | 12,000 | Stock | 19,800 |
| Capital Accounts: | Debtors | 15,000 | |
| Ajay | 33,000 | Livestock | 30,000 |
| Vijay | 45,000 | Plant and Machinery | 62,100 |
| Sonjay | 24,000 | ||
| 1,46,700 | 1,46,700 | ||
On 1st April 2020 Sanjay retired from the firm on the following terms:
- R.D.D. is to be maintained at 10% on debtors.
- ₹ 300 to be written off from creditors.
- Goodwill of the firm is to be valued at ₹ 12,000. however only Sanjay's share in it is to be raised in the books and written off immediately.
- Assets to be revalued as: Stock ₹ 18,900, Plant and machinery ₹ 60,000, Live Stock ₹ 30,600.
- The amount payable to Sanjay is to be transferred to his Loan account after retirement:
Prepare:
- Revaluation Account
- Partners' Capitol Account
- Balance Sheet of the New firm.
Following is the Balance Sheet of the firm of Nana, Nani and Sona who share Profits and Losses in the ratio of their Capital.
| Balance Sheet as on 31st March, 2019 |
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| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Machinery | 20,000 | ||
| Nana | 50,000 | Building | 55,000 | |
| Nani | 20,000 | Stock | 12,000 | |
| Sona | 30,000 | Debtors | 12,000 | 11,000 |
| Creditors | 10,000 | Less: RDD | 1,000 | |
| Bills Payable | 5,000 | Cash | 17,000 | |
| 1,15,000 | 1,15,000 | |||
Sona retires from the business on 1st April 2019 and the following Adjustment were agreed.
- Stock is to be valued at 92% of its Book Value.
- RDD is to be maintained at 10% on debtors.
- The value of Building is to be appreciated by 20%.
- The Goodwill of the firm be fixed at ₹ 12000. Sona’s share in the same be adjusted in the accounts of continuing partners in gaining Ratio.
- The entire Capital of the new firm be fixed at ₹ 1,60,000 between Nana and Nani in their New Profit sharing ratio which is fixed at 3:1 making adjustment in Cash.
- Amount payable to Sona paid in cash.
Prepare: Revaluation Account, Partnership Capital Account and Balance Sheet of the reconstituted firm.
On the reconstitution of a firm the value of furniture increased from ₹ 7,00,000 to ₹ 8,00,000 and stock reduced to ₹ 4,00,000 from ₹ 4,20,000. Gain or loss on revaluation will be ______.
On admission of a new partner, the old partners share the gain or loss on revaluation of assets and reassessment of liabilities in which of the following ratio :
Mita, Geeta and Mohit were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April 2022, they mutually agreed to share profits and losses in the ratio of 2:2:1. It was agreed that:
- Goodwill of the firm was valued at ₹ 1,40,000.
- Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 1,20,000.
Pass necessary journal entries for the above transactions in the books of the firm. Show your working notes clearly.
Madhav and Girdhari were partners in a firm sharing profits and losses in the ratio of 3:1. Their balance sheet as at 31st March; 2022 was as follows :
| Balance Sheet of Madhav and Girdhari as on 31st March, 2022 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital: | Machinery | 4,70,000 | |||
| Madhav | 3,00,000 | 5,00,000 | Investment | 1,10,000 | |
| Girdhari | 2,00,000 | Debtors | 1,20,000 | 1,10,000 | |
| Workmen's Compensation Fund | 60,000 | Less: Provision for Doubtful Debts | 10,000 | ||
| Creditors | 1,90,000 | Stock | 1,40,000 | ||
| Employee's Provident Fund | 1,10,000 | Cash | 30,000 | ||
| 8,60,000 | 8,60,000 | ||||
On 1st April, 2022, they admitted Jyoti into partnership for 1/4th share in the profits of the firm. Jyoti brought ₹ 1,86,000 as her capital and ₹ 40,000 as her of goodwill premium in cash. The following terms were agreed upon:
- Stock was found undervalued by ₹ 23,000.
- 20% of the investments were taken over by Girdhari at book value.
- Claim on account of workmen's compensation amounted to ₹ 70,000, which was to be paid later.
- Creditor included a sum of ₹ 27,000 which was not likely to be claimed.
Prepare Revaluation A/c and Partners' Capital Accounts on Jyoti's admission.
On reconstitution of a firm, the value of machinery was depreciated by ₹1,00,000 and investments increased to ₹70,000 from ₹20,000. Gain or loss on revaluation will be ______.
X, Y and Z are partners sharing profits and losses in the ratio of 2: 3: 1. They decided to share future profits in the ratio of 3:2: 1 with effect from 1st April, 2022. At the time of change of profit sharing ratio, unrecorded furniture will be recorded in the books of Accounts by ______.
Decrease in the value of assets should be ______ to Profit and Loss Adjustment Account.
If an asset is depreciated, Revaluation Account is ______.
The Balance Sheet of Snehal, Samir and Shera is as follows and the partners are sharing profits and losses in the proportion of 2 : 2 : 1 respectively.
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 12,000 | Bank | 7,500 | ||
| Bills Payable | 3,000 | Debtors | 30,000 | 28,500 | |
| General Reserve | 7,500 | Less: R.D.D. | 1,500 | ||
| Capital Accounts: | Furniture | 22,500 | |||
| Snehal | 60,000 | Machinery | 6,000 | ||
| Samir | 45,000 | Freehold Property | 40,500 | ||
| Shera | 22,500 | Goodwill | 45,000 | ||
| 1,50,000 | 1,50,000 | ||||
Shera retires from the firms on 1st April, 2023 on the following terms:
(1) The assets are to be revalued as: Freehold Property ₹ 45,000, Machinery ₹ 7,500 Furniture ₹ 18,000, All debtors are good.
(2) Goodwill of the firm be valued at thrice the average profit of given below : Profits of the firm for five years.
| 2018-19 | ₹ 1,500 |
| 2019 - 20 | ₹ 15,750 |
| 2020-21 | ₹ 15,000 |
| 2021-22 | ₹ 24,000 |
| 2022-23 | ₹ 15,000 |
(3) Shera should be paid ₹ 4,500 by cheque.
(4) The Balance of Shera's Capital Ale should be kept in the business as his loan.
Prepare Profit and Loss Adjustment A/c, Capital Accounts of Partners, Balance Sheet of the new firm.
Decrease in the value of assets should be ______ to Profit and Loss Adjustment Account.
