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Divya, Yasmin and Fatima are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The Balance Sheet of the firm on 31st March, 2018 was as follows:

Liabilities Assets
Sundry Creditors

Public Deposits

Reserve Fund

Outstanding Expenses

Capital A/cs:

Divya

Yasmin

Fatima

70,000

1,19,000

90,000

10,000

5,10,000

3,00,000

5,00,000

Factory Building

Plant and Machinery

Furniture

Stock

Debtors
Less: Provision

Cash at Bank

 

 

 

 

1,50,000
(30,000)

 

7,35,000

1,80,000

2,60,000

1,45,000

1,20,000

1,59,000

15,99,000  15,99,000

On 1st April, 2018, Aditya is admitted as a partner for on-fifth share in the profits with a capital of ₹ 4,50,000 and necessary amount for his share of goodwill on the following terms:

a) Furniture of ₹ 2,40,000 were to be taken over Divya, Yasmin and Fatima equally.

b) A creditor of ₹ 7,000 not recorded in books to be taken into account.

c) Goodwill of the firm is to be valued at 2.5 year’s purchase of average profits of last two years. The profits of the last three years were:

2015-16 – ₹ 6,00,000; 2016-17 – ₹ 2,00,000; 2017-18 – ₹ 6,00,000.

d) At tiem of Aditya’s admission, Yasmin also brought in ₹ 50,000 as fresh capital.

e) Plant and Machinery is revalued to ₹ 2,00,000 and expenses outstanding were brought down to ₹ 9,000.

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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