Ashish and Vishesh were partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2022 was as under:
Ashish and Vishesh were partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2022 was as under:
On 1st April, 2022, Manya was admitted into the firm with 1/4th share in the profits on the following terms:
(i) Manya will bring ₹ 1,00,000 as her capital and ₹ 50,000 as her share of goodwill premium in cash.
(ii) Outstanding electricity bill will be paid off.
(iii) Stock was found over valued by ₹ 12,000.
Pass the necessary Journal entries in the books of the firm on Manya’s admission.
Balance Sheet of Ashish and Vishesh as at 31st March, 2022
| Liabilities | ₹ | Assets | ₹ | |
| Creditors Outstanding Electricity Bill Capital A/cs: Ashish Vishesh | 30,000 20,000 3,00,000 2,00,000 | Cash at Bank Debtors Less: Provision for Bad Debts Stock Machinery Profit and Loss A/c | 80,000 2,000 | 50,000 78,000 1,12,000 3,00,000 10,000 |
| 5,50,000 | 5,50,000 |
Anurag Pathak Answered question June 9, 2024
Solution:-
Important Points:-
I) In the absence of any further information, sacrificing ratio is always equal to the old ratio of the partners.
ii) In the absence of any further information, revaluation loss is debited to the old partners in old ratio.
In the absence of any further information, accumulated profits and reserves are distributed to the old partners in old ratio.
Anurag Pathak Answered question June 9, 2024
