Admission of Partner> Revaluation of Assets and Liabilities

Write a word/phrase/term which can substitute the following statement.

An account that is debited when the partner takes over the asset.

Sai and Shankar are partners, sharing profits and losses in the ratio of 5 : 3. The firm’s balance sheet as on 31^st December, 2017, was as follows:

On 31^st December, 2017 Shanmugam was admitted into the partnership for 1/4 share of profit with ₹ 12,000 as capital subject to the following adjustments.

1. Furniture is to be revalued at ₹ 5,000 and building is to be revalued at ₹ 50,000.
2. Provision for doubtful debts is to be increased to ₹ 5,500
3. An unrecorded investment of ₹ 6,000 is to be brought into account
4. An unrecorded liability ₹ 2,500 has to be recorded now.

Pass journal entries and prepare the Revaluation Account and capital account of partners after admission.

Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1^st April, 2013 they admitted Karuna as a new partners for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2013, was as follows:

It was agreed that
(i) the value of Land and Building will be appreciated by 20%.
(ii) the value of plant be increased by Rs 60,000.
(iii) Karuna will bring Rs 80,000 for her share of goodwill premium.
(iv) the liabilities of Workmen's Compensation Fund were determined at Rs 60,000.
(v) Karuna will bring in cash as capital to the extent of `1/5`th share of the total capital of the new firm.

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

Vrushali and Leena are equal partners in the business. Their Balance sheet as on 31 March 2018 stood as under.

They decided to admit Aparna on 1st April 2018 on the following terms:

1. The Machinery and Building be depreciated by 10%. Reserve for Doubtful Debts to be increased by ₹ 5,000

2. Bills Receivable are taken over by Vrushali at the discount of 10%

3. Aparna should bring Rs. 60,000 as capital for her 1/4th share in future profits.

4. The capital accounts of all the partners be adjusted in proportion to the new profit-sharing ratio by opening the current accounts of the partners.

Prepare Profit and Loss Adjustment A/c, Partner’s Capital A/c, Balance sheet of the new firm.

Seeta and Geeta share profits and losses in the ratio of 3:2 in Partnership Firm. Their Balance Sheet as on 31^st March, 2020 was as under:

Balance Sheet as on 31^st March, 2020

On 1^st April, 2020 they admitted Reeta on the following terms:

1. For half (1/2) share in future profit Reeta should bring ₹ 15,000 as capital and ₹ 7,500 for goodwill in cash.
2. Furniture should be appreciated up to ₹ 8,025 and building be appreciated by 20%.
3. R.D.D. is to be maintained at ₹ 1,500.
4. The stock is to be reduced by 10% and machinery depreciated by 5%.
5. Half of amount of goodwill is withdrawn by old partners.

Pass the necessary Journal Entries in the books of the firm.

The Balance Sheet of Sahil and Nikhil who share profits in the ratio of 3: 2 as on 31st March 2017

Varad admitted on 1St April 2017 on the following terms :

1. Varad was to pay 1,00,000 for his share of capital.

2. He was also to pay 40,000 as his share of goodwill.

3. The new profit sharing ratio was 3:2:3

4. Old partners decided to revalue the assets as follows:

Building 1,00,000, Furniture- 48,000, Debtors - 38,000 (in view of likely bad debts)

5. It was found that there was a liability for 3,000 for goods in March 2017 but recorded on 2nd April 2017.

You are required to prepare:

a) Profit and Loss adjustment accounts

b) Capital accounts of the partners

c) Balance sheet after the admission of Varad

The account which is prepared to adjust the increase or decrease in the value of assets at the time of admission of a partner is called: