0
0 Comments

A and B were partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2018, was as follows:

Liabilities Assets
Capitals:

A

B

Creditors

Employee’s Provident Fund

Workmen Compensation Reserve

Contingency Reserve

 

1,04,000

52,000

1,54,000

16,000

10,000

10,000

Cash

Sundry Debtors
Less Provision for Doubtful Debts

Stock

Prepaid Insurance

Plant and Machinery

Building

Furniture

 

37,600
1,600

 

8,000

36,000

60,000

6,000

76,000

1,40,000

20,000

3,46,000 3,46,000

C was admitted as a new partner and brought ₹ 64,000 as capital and ₹ 15,000 for his share of goodwill premium. The new profit sharing ratio was 5 : 3 : 2. On C’s admission the following was agreed upon:

i) Stock was to be depreciated by 5%.

ii) Provision for doubtful debts was to be made at ₹ 2,000.

iii) Furniture was to be depreciated by 10%

iv) Building was valued at ₹ 1,60,000.

v) Capitals of A and B were to be adjusted on the basis of C’s Capital by bringing or paying in cash as the case may be:

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of reconstituted firm.

[Ans: Gain (Profit) on Revaluation = ₹ 14,600; Capital Accounts: A – ₹ 1,60,000; B – ₹ 96,000; C – ₹ 64,000; A bring bring cash of ₹ 27,740; B will bring ₹ 22,600; Cash Balance = ₹ 1,37,400; Balance Sheet Total – ₹ 4,90,000.]

Anurag Pathak Changed status to publish May 29, 2023
Add a Comment