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Aan and Shaan were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2023 was as under:

Liabilities Assets  
Creditors

Employee’s Provident Fund

Bank Overdraft

Reserve

Capital A/cs:

Aan’s

Shaan’s

2,00,000

30,000

1,70,000

1,50,000

7,00,000

6,00,000

Cash

Debtors
Less: Provision for Doubtful Debts

Stock

Plant and Machinery

Building

 

2,05,000
3,000

 

1,48,000

2,02,000

2,00,000

6,00,000

7,00,000

18,50,000 18,50,000

They agreed to admit Mohan for 1/4th share on the above date subject to the following terms:

i) Mohan to bring in capital equal to 1/4th of the total capital of Aan and Shaan after all adjustments including premium for goodwill.

ii) Building to be appreciated by 20% and stock to be depreciated to 70%.

iii) Provision for Doubtful Debts on Debtors to be raised to ₹ 10,000.

iv) A provision be made for ₹ 18,000 for outstanding legal charges.

v) Mohan’s share of goodwill premium was calculated as ₹ 1,00,000.

Prepare the Revaluation Account, Partner’s Capital Account and the Balance sheet of the new firm.

[Ans: Gain on Revaluation – ₹ 55,000; Capital Accounts: Aan – ₹ 8,83,000; Shaan – ₹ 7,22,000; Mohan – ₹ 4,01,250; Total of Balance Sheet – ₹ 24,24,250.]

Anurag Pathak Changed status to publish May 30, 2023
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