Hemant and Hira are partners, sharing profits in the ratio of 3/5 : 2/5. They admit Hitashi as partner on 1st April, 2023. Their Balance Sheet as at 31st March, 2023 was as follows:
Hemant and Hira are partners, sharing profits in the ratio of 3/5 : 2/5. They admit Hitashi as partner on 1st April, 2023. Their Balance Sheet as at 31st March, 2023 was as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Creditors
General Reserve Capital A/cs: Hemant Hira Current A/cs: Hemant Hira |
45,000 36,000 1,80,000 90,000 30,000 6,000 |
Cash at Bank
Debtors Patents Investments Fixed Assets Goodwill |
60,000
|
15,000 57,600 44,400 24,000 2,16,000 30,000 |
| 3,87,000 | 3,87,000 |
Hitashi is admitted on the following terms:
(i) Provision for Doubtful Debts is to be maintained at 5% on Debtors.
(ii) Outstanding rent of ₹ 15,000 to be provided.
(iii) Accrued income of ₹ 4,500 was not recorded in the books of the firm, now to be recorded.
(iv) Hemant takes investments at ₹ 18,000.
(v) New Profit sharing ratio of partners will be 4 : 3 : 2.
(vi) Hitashi will bring in ₹ 60,000 as capital by cheque.
(vii) Hitashi is to pay an amount equal to her share in firm’s goodwill valued at twice the average profit of the last three financial years which were ₹ 90,000; ₹ 78,000 and ₹ 75,000 respectively.
(viii) Half of the amount of goodwill is to be withdrawn by Hemant and Hira.
Pass the necessary Journal entries, Partner’s Capital and Current Accounts, and the Balance Sheet of the new firm.
Anurag Pathak Changed status to publish July 16, 2023
