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Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2023, their Balance Sheet was:

Liabilities ₹ Assets ₹
Sundry Creditors

Public Deposits

Bank Overdraft

Outstanding Liabilities

Capital A/cs:

Deepika

Rajshree

16,000

61,000

6,000

2,000

48,000

40,000

Cash in Hand

Casht at Bank

Stock

Prepaid Insurance

Sundry Debtors
Less: Provision for Doubtful Debts

Plant and Machinery

Land and Building

Furniture

 

 

 

 

28,800
800

 

1,200

2,800

32,000

1,000

28,000

48,000

50,000

10,000

1,73,000 1,73,000

On 1st April 2023, the partners admit Anshu as a partner on the following terms:

a) New Profit sharing ratio of Deepika, Rajshree, and Anshu will be 5 : 3 : 2.

b) Anshu shall bring in ₹ 32,000 as his capital.

c) Anshu is unable to bring his share of goodwill. Partners, therefore, decide to calculate the goodwill on the basis of Anshu’s share in the profits and the capital contribution made by her to the firm.

d) Plant and Machinery is to be valued at ₹ 60,000, Stock at ₹ 40,000 and the provision for doubtful debts is to be maintained at ₹ 4,000. Value of Land and Building has appreciated by 20%. Furniture has been depreciated by 10%.

e) There is additional liability of ₹ 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities, stated in the above Balance Sheet. Partners decide to show this liability in the books of account of the reconstituted firm.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of Deepika, Rajshree and Anshu.

Anurag Pathak Changed status to publish May 27, 2023
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