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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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