Arsh and Daksh are partners in a firm with profit sharing ratio as follows: 1/2 to Arsh, 1/3 to Daksh and 1/6 carried to a Reserve. They admit Sachi as a partner on 1st April, 2023. The Balance Sheet of the firm as at 31st March, was as follows:
Arsh and Daksh are partners in a firm with profit sharing ratio as follows: 1/2 to Arsh, 1/3 to Daksh and 1/6 carried to a Reserve. They admit Sachi as a partner on 1st April, 2023. The Balance Sheet of the firm as at 31st March, was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Capital A/cs:
Arsh Daksh General Reserve Workmen Compensation Reserve Employee’s Provident Fund Creditors |
50,000 40,000 30,000 5,000 5,000 20,000 |
Building
Machinery Stock Debtors Cash at Bank Goodwill Advertisement Expenditure |
50,000 30,000 18,000 22,000 5,000 20,000 5,000 |
| 1,50,000 | 1,50,000 |
Following adjustments are required on the admission of Sachi:
(i) Sachi brings ₹ 30,000 for 1/5th share in the firm.
(ii) Goodwill of the firm was valued at ₹ 25,000 and Sachi brings her share of goodwill in cash.
(iii) Stock is undervalued by 10%.
(iv) Creditors include ₹ 800 which is not to be paid, therefore, has to be written back.
(v) For Debtors, the following debts proved bad or doubtful –
(a) ₹ 2,000 due from Amit, bad to the full extent.
(b) ₹ 4,000 due from Bhushan – insolvent, estate expected to pay on 50%.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.
Anurag Pathak Changed status to publish July 16, 2023
