X and Y are partners sharing profits and losses in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2021 stood as follows:
X and Y are partners sharing profits and losses in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2021 stood as follows:
They decided that with effect from 1st April, 2021, they will share profits and losses in the ratio of 2 : 1. For this purpose they decided that:
(i) Fixed assets are to be depreciated by 10%.
(ii) Stock by valued at ₹ 1,90,000.
(iii) An amount of ₹ 3,700 included in creditors is not likely to be claimed.
Partners decided to record the revised values in the books. However, they do not want to disturb the reserves. You are required to prepare journal entries, capital accounts of the partners and the revised balance sheet.
[Ans. Profit on Revaluation ₹ 31,500; Adjustment for Reserve : Dr. X by ₹ 4,000 and Cr. Y by ₹ 4,000; Capitals X ₹ 2,54,000 and Y ₹ 1,37,500; Balance Sheet Total ₹ 4,57,800.]
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors | 28,000 | Cash | 20,000 |
| Reserve | 42,000 | Sundry Debtors | 1,20,000 |
| Stock | 1,40,000 | ||
| Capital Accounts: X Y | 2,40,000 1,20,000 | Fixed Assets | 1,50,000 |
| Total | 4,30,000 | Total | 4,30,000 |
Anurag Pathak Answered question August 2, 2024
