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Sunaina and Tamanna are partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2020 stood as follows:

Liabilities Assets
Capital A/cs:

Sunaina

Tamanna

Current A/cs:

Sunaina

Tamanna

General Reserve

Workmen Compensation Reserve

Creditors

 

60,000

80,000

10,000

30,000

1,20,000

50,000

1,50,000

Plant and Machinery

Land and Building

Debtors
Less: Provision for Doubtful Debts

Stock

Cash

Cash Goodwill

 

 

1,90,000
40,000

 

1,20,000

1,40,000

1,50,000

40,000

30,000

20,000

5,00,000  5,00,000

They agreed to admit Pranav into partnership for 1/5th share of profits on 1st April, 2020 on the following terms:

a) All Debtors are good.

b) Value of Land and Building to be increased to ₹ 1,80,000.

c) Value of Plant and Machinery to be reduced by ₹ 20,000.

d) The liability against workmen’s Compensation Fund is determined at ₹ 20,000 which is to be paid later in the year.

e) Anil, to whom ₹ 40,000 were payable (already included in above creditors), drew a bill of exchange for 3 months which was duly accepted.

f) Pranav to bring in capital of ₹ 1,00,000 and ₹ 10,000 as premium for goodwill in cash.

Journalise.

[Ans: Gain on Revaluation – ₹ 60,000; Sacrificing Ratio – 3 : 2.]

Anurag Pathak Changed status to publish May 27, 2023
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