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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
Less Provision for Bad debts

Stock

Investments (Market Value ₹ 4,40,000)

 

6,50,000
50,000

 

1,40,000

6,00,000

3,00,000

5,00,000

15,40,000  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.

Anurag Pathak Changed status to publish May 25, 2023
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