On 31st March 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3 : 1 was as follows:
On 31st March 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3 : 1 was as follows:
| Liabilities | ₹ | Assets |  | ₹ | |
| Creditors
Employee’s Provident Fund Investment Fluctuation Reserve General Reserve Capitals: Abhir Divya |
6,00,000 4,00,000
|
2,20,000 1,00,000 1,00,000 1,20,000
10,00,000 |
Cash at Bank
Debtors Stock Investments (Market Value ₹ 4,40,000) |
6,50,000
|
1,40,000 6,00,000 3,00,000 5,00,000 |
| 15,40,000 | Â 15,40,000 |
They decided to admit Vibhor on 1st April, 2017 for 1/5th share.
a) Vibhor shall bring ₹ 80,000 as his share of goodwill premium
b) Stock was overvalued by ₹ 20,000.
c) A debtor whose dues of ₹ 5,000 were written off as bad debts, paid ₹ 4,000 in full settlement.
d) Two months’ salary @ ₹ 6,000 per month was outstanding.
e) Vibhor was to bring in capital to the extent of 1/5th of the total capital of the new firm.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm.
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There is a fluctuation of ₹ 60,000 in investments. It is adjusted from Investment Fluctuation Reserve. 1,00,000 – 60,000 = ₹ 40,000.
How investment fluctuation fund came 40,000 in partners capital account?