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Fateh, Vipin and Ishant are partners sharing profits and losses in the ratio of 3 : 2 : 1. Manoj is admitted as a new partner on 1st April, 2023 for 1/6th share and is to bring ₹ 1,25,000 as Capital. Following is Balance Sheet of the firm as at 31st March, 2023:

Liabilities Assets
Capital A/cs:

Fateh

Vipin

Ishant

Creditors

Bills Payable

1,50,000

1,50,000

1,00,000

75,000

25,000

Building

Plant and Machinery

Furniture

Stock

Debtors

Bills Receivable

Bank

1,25,000

1,00,000

75,000

50,000

75,000

50,000

25,000

5,00,000 5,00,000

Following adjustments are required on Manaoj’s admission:

(i) Out of the Creditors, a sum of ₹ 25,000 is due to Manoj which will be transferred to his capital.

(ii) Advertisement Expenses of ₹ 3,000 is to be carried forward to next accounting period.

(iii) Expenses debited in the Profit & Loss Account includes a sum of ₹ 5,000 paid for Vipin’s personal expenses.

(iv) A Bill of Exchange of ₹ 10,000, which was previously discounted with the bank, was dishonoured on 31st March, 2023 but entry was not passed yet.

(v) Provision for Doubtful Debts @ 5% is to be created against Debtors.

(vi) Expenses on revaluation amounting to ₹ 5,250 is paid by Fateh.

Prepare necessary Ledger Accounts and Balance Sheet after Manoj’s admission.

Anurag Pathak Changed status to publish March 30, 2024
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