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Question
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 1 : 2. On 31st March, 2019, their Balance Sheet was:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Bills Payable |
12,000 |
Freehold Premises | 40,000 | ||
| Sundry Creditors | 28,000 | Machinery | 30,000 | ||
| General Reserve | 12,000 | Furniture | 12,000 | ||
| Capital A/cs: | Stock | 22,000 | |||
| X | 30,000 | Sundry Debtors |
20,000 |
|
|
| Y | 20,000 | Less: Provision for Doubtful Debts |
1,000 |
19,000 |
|
| Z | 28,000 |
78,000 |
Cash |
7,000 |
|
|
1,30,000 |
1,30,000 |
||||
Z retired on 1st April, 2019 from the business and the partners agree to the following:
(a) Freehold Premises and Stock are to be appreciated by 20% and 15% respectively.
(b) Machinery and Furniture are to be reduced by 10% and 7% respectively.
(c) Provision for Doubtful Debts is to be increased to ₹ 1,500.
(d) Goodwill of the firm is valued at ₹ 21,000 on Z's retirement.
(e) Continuing partners to adjust their capitals in their new profit-sharing ratio after retirement of Z. Surplus/deficit, if any, in their Capital Accounts will be adjusted through Current Accounts.
Prepare necessary Ledger Accounts and draw the Balance Sheet of the reconstituted firm.
Solution
Revaluation Account
|
Dr. |
|
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
|
Machinery (30,000 × 10%) |
3,000 |
Freehold Premises (40,000 × 20%) |
8,000 |
|
|
Furniture (12,000 × 7%) |
840 |
Stock (22,000 × 15%) |
3,300 |
|
|
Provision for Doubtful Debts (1,500 – 1,000) |
500 |
|
|
|
|
Profit transferred to: |
|
|
|
|
|
X’s Capital A/c |
3,480 |
|
|
|
|
Y’s Capital A/c |
1,160 |
|
|
|
|
Z’s Capital A/c |
2,320 |
6,960 |
|
|
|
|
11,300 |
|
11,300 |
|
Partner’s Capital Accounts
|
Dr. |
|
Cr. |
|||||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Z’s Capital A/c |
5,250 |
1,750 |
|
Balance b/d |
30,000 |
20,000 |
28,000 |
|
|
|
|
|
General Reserve |
6,000 |
2,000 |
4,000 |
|
Z’s Loan A/c |
|
|
41,320 |
X’s Capital A/c (Goodwill) |
|
|
5,250 |
|
|
|
|
|
Y’s Capital A/c (Goodwill) |
|
|
1,750 |
|
Balance c/d |
34,230 |
21,410 |
|
Revaluation A/c (Profit) |
3,480 |
1,160 |
2,320 |
|
|
39,480 |
23,160 |
41,320 |
|
39,480 |
23,160 |
41,320 |
|
Y’s Current A/c |
|
7,500 |
|
Balance b/d |
34,230 |
21,410 |
|
|
Balance c/d (WN 3) |
41,730 |
13,910 |
|
X’s Current A/c |
7,500 |
|
|
|
|
41,730 |
21,410 |
|
|
41,730 |
21,410 |
|
Balance Sheet
as on 1st April, 2019
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Bills Payable |
12,000 |
Freehold Premises (40,000 + 8,000) |
48,000 |
||
|
Sundry Creditors |
28,000 |
Machinery (30,000 – 3,000) |
27,000 |
||
|
Z’s Loan |
41,320 |
Furniture (12,000 – 840) |
11,160 |
||
|
Capital A/cs: |
|
Stock (22,000 + 3,300) |
25,300 |
||
|
X |
41,730 |
|
Sundry Debtors |
20,000 |
|
|
Y |
13,910 |
55,640 |
Less: Provision for Doubtful Debts |
(1,500) |
18,500 |
|
Y’s Current A/c |
7,500 |
Cash |
7,000 |
||
|
|
|
X’s Current A/c |
7,500 |
||
|
|
1,44,460 |
|
1,44,460 |
||
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
Old Ratio (X, Y and Z) = 3 : 1 : 2
Z retires from the firm.
∴ New Ratio (X and Y) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 21,000
Z’s Share of Goodwill = `21,000 xx 2/6 = "Rs" 7,000`
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 1).
`"X's share" = 7,000 xx 3/4 = "Rs" 5,250`
`"Y's share" = 7,000 xx 1/4 = "Rs" 1,750`
WN 3 Adjustment of Partners’ Capital after Z’s Retirement
Combined Capital of X and Y after all adjustments = 34,230 + 21,410 = Rs. 55,640
New Ratio = 3 : 1
`"X's New Capital" = 55,640 xx 3/4 = "Rs" 41,730`
`"Y's New Capital" = 55,640 xx 1/4 = "Rs" 13,910`
APPEARS IN
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Creditors | 49,000 | Cash | 8,000 | |
| Reserve | 18,500 | Debtors | 19,000 | |
| Capital A/cs: X | 82,000 | Stock | 42,000 | |
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| 2,85,000 | 2,85,000 | |||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
24,140 |
Cash at Bank | 3,300 | ||
| Capital A/cs: |
|
Sundry Debtors |
3,045 |
|
|
| X | 12,000 |
|
Less: Provision for Doubtful Debts |
105 |
2,940 |
| Y |
9,000 |
|
Stock | 4,800 | |
| Z | 6,000 | 27,000 | Plant and Machinery | 5,100 | |
|
|
Land and Building | 15,000 | |||
|
|
|
Y's Loan |
20,000 |
||
|
51,140 |
51,140 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
21,000 |
Cash at Bank | 5,750 | ||
| Workmen Compensation Reserve |
12,000 |
Debtors |
40,000 |
|
|
| Investments Fluctuation Reserve |
6,000 |
Less: Provision for Doubtful Debts |
2,000 |
38,000 |
|
| Capital A/cs: | Stock | 30,000 | |||
| X | 68,000 | Investment (Market Value ₹ 17,600) | 15,000 | ||
| Y |
32,000 |
|
Patents | 10,000 | |
| Z |
21,000 |
1,21,000 |
Machinery |
50,000 |
|
| Goodwill | 6,000 | ||||
| Advertisement Expenditure | 5,250 | ||||
|
1,60,000 |
1,60,000 |
||||
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(e) Liability for Workmen Compensation to the extent of ₹ 750 is to be created.
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
10,800 |
Cash at Bank | 13,000 | ||
| Bills Payable |
5,000 |
Debtors |
10,000 |
|
|
| Capital A/cs: |
|
Less: Provision for Doubtful Debts |
200 |
9,800 |
|
| A | 45,000 | Stock | 9,000 | ||
| B |
30,000 |
|
Machinery | 24,000 | |
| C |
15,000 |
90,000 |
Freehold Premises |
50,000 |
|
|
1,05,800 |
1,05,800 |
||||
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(b) Freehold Premises be appreciated by 10%.
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(d) Machinery be reduced by 5%.
(e) Liability for Workmen Compensation to the extent of ₹ 1,500 would be created.
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| Liabilities | ₹ | Assets | ₹ | |
| Sundry Creditors | 39,750 | Bank (Minimum Balance) | 15,000 | |
| Employees' Provident Fund | 5,250 | Debtors | 97,500 | |
| Workmen Compensation Reserve | 22,500 | Stock | 82,500 | |
| Capital A/cs: | Fixed Assets | 1,87,500 | ||
| X | 1,65,000 | |||
| Y | 84,000 | |||
| Z | 66,000 | 3,15,000 | ||
| 3,82,500 | 3,82,500 | |||
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(i) Goodwill of the firm is valued at ₹ 1,12,500 and Y's share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3 : 2.
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(iii) Stock be reduced to ₹ 75,000.
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X, Y, and Z were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February, 2020, Y died and it was decided that the new profit-sharing ratio between X and Z will be equal. Partnership Deed provided for the following on the death of a partner:
(a) His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years. The firm's profits for the last four years were:
| Year | 2015-16 | 2016-17 | 2017-18 | 2018-19 |
| Profit (₹) | 1,50,000 | 1,00,000 | 50,000 |
1,00,000
|
(b) His share of profit in the year of his death was to be computed on the basis of average profit of past two years.
Pass necessary Journal entries relating to goodwill and profit to be transferred to Y's Capital Account.
X and Y are partners. The Partnership Deed provides inter alia:
(a) That the Accounts be balanced on 31st March every year.
(b) That the profits be divided as: X one-half, Y one-third and carried to a Reserve one-sixth.
(c) That in the event of the death of a partner, his Executors be entitled to be paid:
(i) The Capital to his credit till the date of death.
(ii) His proportion of profits till the date of death based on the average profits of the last three completed years.
(iii) By way of Goodwill, his proportion of the total profits for the three preceding years.
(d)
| BALANCE SHEET as at 31st March, 2019 | |||||
| Liabilities | ₹ | Assets | ₹ | ||
| Capital A/cs: | Sundry Assets | 21,000 | |||
| X | 9,000 | ||||
| Y | 6,000 | 15,000 | |||
| Reserve | 3,000 | ||||
| Creditors | 3,000 | ||||
| 21,000 | 21,000 | ||||
Profits for three years were: 2016-17 − ₹ 4,200; 2017-18 − ₹ 3,900; 2018-19 − ₹ 4,500. Y died on 1st August, 2019. Prepare necessary accounts.
Virad, Vishad and Roma were partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. On 31st March, 2013, their Balance Sheet was as under:
| Liabilities | ₹ | Assets | ₹ | ||
| Capital A/cs: | Buildings | 2,00,000 | |||
| Virad | 3,00,000 | Machinery | 3,00,000 | ||
| Vishad | 2,50,000 | Patents | 1,10,000 | ||
| Roma | 1,50,000 | 7,00,000 | Stock | 1,00,000 | |
| Reserve Fund | 60,000 | Debtors | 80,000 | ||
| Creditors | 1,10,000 | Cash | 80,000 | ||
| 8,70,000 | 8,70,000 | ||||
Virad died on 1st October, 2013. It was agreed between his executors and the remaining partners that:
(i) Goodwill of the firm be valued at 212 years purchase of average profits for the last three years. The average profits were ₹ 1,50,000.
(ii) Interest on capital be provided at 10% p.a.
(iii) Profits for the 2013-14 be taken as having accrued at the same rate as that of the previous year which was ₹ 1,50,000.
Prepare Virad's Capital Account to be presented to his Executors as on 1st October, 2013.
A, B and C are partners in a firm sharing profits in the proportion of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2018 stood as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Sundry Creditors |
2,70,000 |
Cash in Hand |
42,500 |
||
|
General Reserve |
1,20,000 |
Cash at Bank |
2,14,500 |
||
|
Capital A/cs: |
Debtors | 1,63,000 | |||
| A |
2,00,000 |
Stock | 17,500 | ||
| B | 1,20,000 | Investment | 1,32,500 | ||
| C |
80,000 |
4,00,000 |
Building | 2,10,000 | |
| B's Loan | 10,000 | ||||
|
7,90,000 |
7,90,000 |
||||
B died on 30th June, 2018 and according to the deed of the said partnership his executors are entitled to be paid as under:
(a) The capital to his credit at the time of his death and interest thereon @ 10% per annum.
(b) His proportionate share of General Reserve.
(c) His share of profit for the intervening period will be based on the sales during that period. Sales from 1st April, 2018 to 30th June, 2018 were as ₹ 12,00,000. The rate of profit during past three years had been 10% on sales.
(d) Goodwill according to his share of profit to be calculated by taking twice the amount of profits of the last three years less 20%. The profit of the previous three years were: 1st Year: ₹ 82,000; 2nd year: ₹ 90,000; 3rd year ₹ 98,000.
(e) The investments were sold at par and his executors were paid out in full.
Prepare B's Capital Account and his Executors' Account.
X, Y and Z were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Z died on 30th June, 2018. The Balance Sheet of the firm as at that 31st March, 2018 is as follows:
BALANCE SHEET as at 31st March, 2018
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| X's Capital A/c | 2,40,000 |
Machinery |
2,40,000 | ||
| Y's Capital A/c | 1,60,000 | Furniture | 1,50,000 | ||
|
Z's Capital A/c |
80,000 | 4,80,000 | Investments | 40,000 | |
| X's Current A/c | 16,000 | Stock | 64,000 | ||
| Y's Current A/c | 5,000 | Sundry Debtors | 50,000 | ||
| Reserve | 60,000 | Bills Receivable | 22,000 | ||
| Bills Payable | 34,000 | Cash at Bank | 37,000 | ||
| Sundry Creditors | 40,000 | Cash in Hand | 22,000 | ||
| Z's Current A/c | 10,000 | ||||
| 6,35,000 | 6,35,000 | ||||
The following decisions were taken by the remaining partners:
(a) A Provision for Doubtful Debts is to be raised at 5% on Debtors.
(b) While Machinery to be decreased by 10%, Furniture and Stock are to be appreciated by 5% and 10% respectively.
(c) Advertising Expenses ₹ 4,200 are to be carried forward to the next accounting year and, therefore, it is to be adjusted through the Revaluation Account.
(d) Goodwill of the firm is valued at ₹ 60,000.
(e) X and Y are to share profits and losses equally in future.
(f) Profit for the year ended 31st March, 2018 was ₹ 8,16,000 and Z's share of profit till the date of death is to be determined on the basis of profit for the year ended 31st March, 2018.
(g) The Fixed Capital Method is to be converted into the Fluctuating Capital Method by transferring the Current Account balances to the respective Partners' Capital Accounts.
Prepare the Revaluation Account, Partners' Capital Accounts and prepare C's Executors's Account to show that C's Executors were paid in two half-yearly instalments plus interest of 10% p.a. on the
unpaid balance. The first instalment was paid on 31st December, 2018.
Ravi and Mukesh are sharing profits in the ratio of 7 : 3. They admit Ashok for 3/7th share in the firm which he takes 2/7th from Ravi and 1/7th from Mukesh. Calculate new profit-sharing ratio.
A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted D as a new partner for 1/8th share in the profits, which he acquired 1/16th from B and 1/16th from C. Calculate the new profit-sharing ratio of A, B, C and D.
X, Y and Z are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2018 was as follows:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| Sundry Creditors | 18,000 | Goodwill | 12,000 | ||
| Investments Fluctuation Reserve | 7,000 | Patents | 52,000 | ||
| Workmen Compensation Reserve | 7,000 | Machinery | 62,400 | ||
| Capital A/cs: | Investment | 6,000 | |||
| X | 1,35,000 | Stock | 20,000 | ||
| Y | 95,000 | Sundry Debtors | 24,000 | ||
|
Z |
74,000 | 3,04,000 | Less: Provision for Doubtful Debts | 4,000 | 20,000 |
| Loan to Z | 1,000 | ||||
| Cash at Bank | 600 | ||||
| Profit and Loss A/c | 1,50,000 | ||||
| Z's Drawings | 12,000 | ||||
| 3,36,000 | 3,36,000 | ||||
Z died on 1st April, 2018, X and Y decide to share future profits and losses in ratio of 3 : 5. It was agreed that:
(i) Goodwill of the firm be valued 212 years' purchase of average of four completed years' profits which were: 2014→₹ 1,00,000; 2015-16→₹ 80,000; 2016→17 ₹ 82,000.
(ii) Stock is undervalued by ₹ 14,000 and machinery is overvalued by ₹ 13,600.
(iii) All debtors are good. A debtor whose dues of ₹ 400 were written off as bad debts paid 50% in full settlement.
(iv) Out of the amount of insurance premium debited to Profit and Loss Account, ₹ 2,200 be carried forward as prepaid insurance premium.
(v) ₹ 1,000 included in Sundry Creditors is not likely to arise.
(vi) A claim of ₹ 1,000 on account of Workmen Compensation to be provided for.
(vii) Investment be sold for ₹ 8,200 and a sum of ₹ 11,200 be paid to executors of Z immediately. The balance to be paid in four equal half-yearly instalments together with interest @ 8% p.a. at half year rest.
Show Revaluation Account, Capital Accounts of Partners and the Balance Sheet of the new firm.
X, Y and Z were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2018, their Balance Sheet was as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Trade Creditors |
1,20,000 |
Cash at Bank |
1,80,000 |
||
|
Bills Payable |
80,000 |
Stock |
1,40,000 |
||
|
General Reserve |
60,000 |
Sundry Debtors | 80,000 | ||
|
Capital A/cs: |
Building | 3,00,000 | |||
| X |
7,00,000 |
Advance to Y | 7,00,000 | ||
| Y | 7,00,000 | Profit and Loss A/c | 3,20,000 | ||
| Z |
60,000 |
14,60,000 |
|||
|
17,20,000 |
17,20,000 |
||||
Y died on 30th June, 2018. The Partnership Deed provided for the following on the death of a partner:
(i) Goodwill of the business was to be calculated on the basis of 2 times the average profit of the past 5 years. Profits for the years ended 31st March, 2018, 31st March, 2017, 31st March, 2016, 31st March, 2015 and 31st March, 2014 were ₹ 3,20,000 (Loss); ₹ 1,00,000; ₹ 1,60,000; ₹ 2,20,000 and ₹ 4,40,000 respectively.
(ii) Y's share of profit or loss from 1st April, 2018 till his death was to be calculated on the basis of the profit or loss for the year ended 31st March, 2018.
You are required to calculate the following:
(a) Goodwill of the firm and Y's share of goodwill at the time of his death.
(b) Y's share in the profit or loss of the firm till the date of his death.
(c) Prepare Y's Capital Account at the time of his death to be presented to his executors.
Find New Profit-sharing Ratio:
A and B are partners. They admit C for 1/4th share. In future, the ratio between A and B would be 2 : 1.
Find New Profit-sharing Ratio:
X, Y and Z are partners in the ratio of 3 : 2 : 1. W joins the firm as a new partner for 1/6th share in profits. Z would retain his original share
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April, 2018, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill should be valued at two years' purchase of the average profit of the preceding five years. The profits and losses of the preceding years ended 31st March, are:
| Year | 2013-14 | 2014-15 | 2015-16 | 2016-17 | 2017-18 |
| Profits (₹) | 70,000 | 85,000 | 45,000 | 35,000 | 10,000 (Loss) |
You are required to calculate goodwill and pass journal entry.
Jai and Raj are partners sharing profits in the ratio of 3 : 2. With effect from 1st April, 2019, they decided to share profits equally. Goodwill appeared in the books at ₹ 25,000. As on 1st April, 2019, it was valued at ₹ 1,00,000. They decided to carry goodwill in the books of the firm.
Pass the Journal entry giving effect to the above.
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry .
| Book Values (₹) | |
| General Reserve | 6,000 |
| Profit and Loss A/c (Credit) | 24,000 |
| Advertisement Suspense A/c | 12,000 |
Pass an Adjustment Entry.
A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring ₹ 14,000 as his share of goodwill to be distributed between A and B. C's share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B?
X and Y are partners sharing profits in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet showed General Reserve of ₹ 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2. Pass necessary Journal entry in each of the following alternative cases:
(i) When General Reserve is not to be shown in the new Balance Sheet.
(ii) When General Reserve is to be shown in the new Balance Sheet.
Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2019 was as follows:
|
Liabilities |
Amount |
Assets |
Amount |
|
| Sundry Creditors | 75,000 | Cash in Hand | 24,000 | |
| General Reserve | 90,000 | Cash at Bank | 1,40,000 | |
| Capital A/cs: | Sundry Debtors |
80,000 |
||
| Ashish |
3,00,000 |
Stock | 1,40,000 | |
| Aakash | 3,00,000 | Land and Building | 4,00,000 | |
| Amit |
2,75,000 |
8,75,000 | Machinery | 2,50,000 |
| Advertisement Suspense | 6,000 | |||
| 10,40,000 | 10,40,000 | |||
The partners decided to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2019. They also decided that:
(i) Value of stock to be reduced to ₹ 1,25,000.
(ii) Value of machinery to be decreased by 10%.
(iii) Land and Building to be appreciated by ₹ 62,000.
(iv) Provision for Doubtful Debts to be made @ 5% on Sundry Debtors.
(v) Aakash was to carry out reconstitution of the firm at a remuneration of ₹ 10,000.
Pass necessary Journal entries to give effect to the above.
Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3. On 1st April, 2016, their Balance Sheet was as follows:
BALANCE SHEET OF SURESH, RAMESH, MAHESH AND Ganesh
as on 1st April, 2016
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Fixed Assets | 6,00,000 | ||
| Suresh | 1,00,000 | Current Assets | 3,45,000 | |
| Ramesh | 1,50,000 | |||
| Mahesh | 2,00,000 | |||
| Ganesh | 2,50,000 | 7,00,000 | ||
| Sundry Creditors | 1,70,000 | |||
| Workmen Compensation Reserve | 75,000 | |||
| 9,45,000 | 9,45,000 | |||
From the above date, the partners decided to share the future profits equally. For this purpose the goodwill of the firm was valued at ₹ 90,000. It was also agreed that:
(a) Claim against Workmen Compensation Reserve will be estimated at ₹ 1,00,000 and fixed assets will be depreciated by 10%.
(b) The Capitals of the partners will be adjusted according to the new profit-sharing ratio. For this, necessary cash will be brought or paid by the partners as the case may be.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.
Following is the Balance Sheet of A and B, who shared Profits and Losses in the ratio of 2 : 1, as at 1st April, 2019:
BALANCE SHEET OF A AND B
as on 1st April, 2019
| Liabilities | Amount (₹) |
Assets |
Amount (₹) |
|
| Capital A/cs: | Land ad Building | 2,90,000 | ||
| A | 3,00,000 | Furniture | 80,000 | |
| B | 2,00,000 | 5,00,000 | Stock | 2,40,000 |
| Reserve | 1,50,000 | Debtors | 1,50,000 | |
| Creditors | 2,00,000 | Bank | 60,000 | |
| Cash | 30,000 | |||
| 8,50,000 | 8,50,000 | |||
On the above date, the partners changed their profit-sharing ratio to 3 : 2. For this purpose, the goodwill of the firm was valued at ₹ 3,00,000. The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5,00,000;
(b) Reserve is to be maintained at ₹ 3,00,000.
(c) The total capital of the partners in the new firm will be ₹ 6,00,000, which will be shared by the partners in their new profit-sharing ratio.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.
A and B were partners. They shared profits as A-`1/2`, B-`1/3` and carried to reserve `1/6`. B died. The balance of reserve on the date of B's death was ₹ 30,000. B's share of a reserve will be:
A, B and C are three partners sharing profit and loss in the ratio of 3:2:1. B retires from the firm. Suppose A and C purchase the share of retiring partners equally. What is the new profit sharing ratio?
