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Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:

Liabilities ₹ Assets ₹
Madhu’s Capital

Vidhi’s Capital

General Reserve

Bills Payable

5,20,000

3,00,000

30,000

1,50,000

Land and Building

Machinery

Stock

Debtors
Less: Provision

Bank

 

 

 

3,00,000
10,000

3,00,000

2,80,000

80,000

2,90,000

 

50,000

10,00,000 10,00,000

Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their new profit sharing ratio will be 2 : 3 : 5. Gayatri brought ₹ 4,00,000 as her capital and her share of goodwill premium in cash.

a) Goodwill of the firm was valued at ₹ 3,00,000.

b) Land and Building was found undervalued by ₹ 26,000.

c) Provision for doubtful debts was to be made equal to 5% of the debtors.

d) There was a claim of ₹ 6,000 on account of workmen compensation.

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

Anurag Pathak Changed status to publish May 25, 2023
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