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Balance Sheet of X and Y, who share profits and losses as 5 : 3, as at 1st April 2022 is:

Liabilities ₹ Assets ₹
X’s Capital

Y’s Capital

General Reserve

Workmen Compensation Reserve

Employee’s Provident Fund

Sundry Creditors

52,000

54,000

4,800

10,000

1,000

5,000

Goodwill

Machinery

Furniture

Sundry Debtors

Stock

Bank

Advertisement Suspense A/c

8,000

38,000

15,000

33,000

7,000

25,000

800

1,26,800 1,26,800

On the above date, they decided to change their profit-sharing ratio to 3 : 5 and agreed upon the following:

a) Goodwill be valued on the basis of two years’ purchase of the average profit of the last three years. Profits for the years ended 31st March are 2020 – ₹ 7,500; 2021 – ₹ 4,000; 2022 – ₹ 6,500.

b) Machinery and stock be revalued at ₹ 45,000 and ₹ 8,000 respectively.

c) Claim on account of workmen’s compensation is ₹ 6,000.

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

Anurag Pathak Changed status to publish May 2, 2023
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