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Concept: Preparation of Revaluation Account and Balance Sheet

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J, H and K were partners in a firm sharing profits in the ratio of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:

                                   Balance Sheet of J,H and K as on 31-3-2015

LIabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       J                            1,00,000

       H                             80,000

       K                             40,000 

 

42,000

20,000

80,000

 

 

 

2,20,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         80,000

      Less:                         6,000  

Cash

2,24,000

40,000

38,000

24,000

30,000

 

74,000

32,000

  3,62,000   3,62,000

On the above data H retires and J and K agreed to continue the business on the following terms:

(i) Goodwill of the firm was valued at Rs.1,02,000.

(ii) There was a claim of Rs.8,000 for workmen's compensation.

(iii) Provision for bad debts was to be reduced by Rs.2,000.

(iv) H will be paid Rs.14,000 in cash and the balance will be transferred in his loan account which will be paid in four equal yearly installments together with interest @ 10% p.a.

(v) The new profit sharing ratio between J and K will be 3:2 and their capitals will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.

X, Y and Z were partners in a firm sharing profit’s in the firm of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:

                                   Balance sheet of X,Y and Z as on 31st march,2015

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       X                            50,000

       Y                             40,000

       Z                            20,000

 

21,000

10,000

40,000

 

 

 

1,10,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         40,000

      Less:                         3,000

Cash

62,000

20,000

19,000

12,000

15,000

 

37,000

16,000 

  1,81,000   1,81,000

On the above date Y retired and X and Z agreed to continue the business on the following terms:

(1) Goodwill of the firm was valued at Rs.51,000

(2) There was a claim of 4,000 for Workmen’s Compensation.

(3) Provision for bad debts was to be reduced by 1,000

(4) Y will be paid 8,200 in cash and the balance will be transferred in his loan account which will be paid in four equally yearly instalments together with interest @ 10% p.a.

(5) The new profit sharing ratio between X and Z will be 3:2 and their capitals will be in their new profit sharing ratio. The Capital adjustments will be done by opening current Accounts

Prepare Revaluation Account. Partner’s Capital Accounts and the Balance Sheet of reconstituted firm.

A. B and C were partners in a firm sharing profits in the ratio of 5: 3: 2. On 31-3-2015 their Balance Sheet was as follows:

                                                              Balance Sheet of A,B and C as on 31-3-2015

Liabilities Amount(Rs) Assets Amount(Rs.)

Creditors

Investment Fluctuation Fund

P & L Account

Capitals

     A                                                       1,50,000

     B                                                       1,20,000

     C                                                          60,000

 

 

63,000

30,000

1,20,000

 

 

 

3,30,000

 

 

Land & Building

Motor Vans

Investments

Machinery

Stock

Debtors                                                     1,20,000

       Less : Provision                                       9,000

Cash

 

1,86,000

60,000

57,000

36,000

45,000

 

 

 

 

  5,43,000   5,43,000

 

On the above date B retired and A and C agreed to continue the business on the following terms:

(1) Goodwill of the firm was valued at Rs.1, 53,000.

(2) Provision for bad debts was to be reduced by Rs.3,000.

(3) There was a claim of Rs.12,000 for workmen compensation.

(4) B will be paid Rs.24,600 in cash and the balance will be transferred to his loan account which will be paid in four equal yearly instalments together with interest 10% p.a.

(5) The new profit sharing ratio between A and C will be 3:2 and their capital will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of A and C.

X, Y and Z were partners in a firm sharing profit in the ratio of 1:2:3. On 31-3-2015 their Balance sheet was as follows :

                                                                             Balance Sheet of X,Y and Z as on 31-3-2015

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

Bills Payable

General Reserve

Capitals

      X                                    50,000

      Y                                    25,000

      Z                                   12,500  

                25,000

                10,000

                10,000

 

 

 

               87,500

Land

Building

Plant

Stock

Debtors

Bank

 

                        25,000

                        25,000

                        50,000

                        20,000

                        15,000

                          2,500

 

             1,37,500                          1,37,500

X, Y and Z decided to Share the profits equally with effect from 1-4-2015. For this It was agreed that

(i) Goodwill of the firm will be valued at 75,000

(ii) Land will be revalued at 40,000 and building be depreciated by 6%.

(iii) Creditors of 3,000 were not likely to be claimed and hence should be written off

Prepare Revaluations Account, Partner’s Capital Accounts and Balance Sheet of the reconstitute firm.

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