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Rajesh and Ravi are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet at 31st March, 2023 stood as:

Liabilities Assets
Creditors

Outstanding Rent

Capital A/cs:

Rajesh

Ravi

 

 

 

29,000

15,000

38,500
4,000

44,000

Cash

Stock

Prepaid Insurance

Debtors
Less: Provision for Doubtful Debts

Machinery

Building

Furniture

 

 

 

9,400
400

 

2,000

15,000

1,500

9,000

19,000

35,000

5,000

86,500  86,500

Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for goodwill. So, it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation are made:

a) Stock to decrease by 5%.

b) Provision for Doubtful Debts is to be ₹ 500.

c) Furniture to decrease by 10%

d) Building is valued at ₹ 40,000.

Show necessary Ledger Account and Balance Sheet of new firm.

Anurag Pathak Changed status to publish May 25, 2023
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