Neha and Tara are partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2012, stood as follows:
Neha and Tara are partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2012, stood as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs:
Neha Tara General Reserve Workmen Compensation Fund Creditors |
8,000 10,000 12,000 5,000 15,000 |
Plant and Machinery
Land and Building Debtors Stock Cash |
19,000 |
12,000 14,000 15,000 6,000 3,000 |
| 50,000 | 50,000 |
They agreed to admit Prachi into partnership for 1/5th share of profits on 1st April, 2012, on the following terms:
(a) All debtors to be considered as good and therefore the provision for doubtful debts to be written back.
(b) Value and Land and Building to be increased to ₹ 18,000.
(c) Value and Plant and Machinery to be reduced by ₹ 2,000.
(d) The liability against Workmen Compensation Fund is determined at ₹ 2,000 which is to be paid later in the year.
(e) Prachi to bring in her share of Goodwill of ₹ 10,000 in cash.
(f) She will further bring in cash so as to make her capital equal to 20% of the total capital of the new firm. (Show your workings clearly)
You are required to prepare:
(i) Revaluation Account,
(ii) Partner’s Capital Accounts and
(iii) Balance Sheet of the Reconstituted firm.
Anurag Pathak Changed status to publish July 17, 2023
