Question

Amal and Vimal are partners in a firm sharing profits and losses in the ratio of 7 : 5. Their balance sheet as on 31^st March, 2019, is as follows:

Liabilities	₹	₹	Assets	₹
Capital accounts:			Land	80,000
Amal	70,000		Furniture	20,000
Vimal	50,000	1,20,000	Stock	25,000
Sundry creditors		30,000	Debtors	30,000
Profit and loss A/c		24,000	Debtors	19,000
		1,74,000		1,74,000

Nirmal is admitted as a new partner on 1.4.2018 by introducing a capital of ₹ 30,000 for 1/3 share in the future profit subject to the following adjustments.

1. Stock to be depreciated by ₹ 5,000
2. Provision for doubtful debts to be created for ₹ 3,000
3. Land to be appreciated by ₹ 20,000

Prepare revaluation account and capital account of partners after admission.

Answer 1

Dr.	Revaluation Account			Cr.
Particulars		₹	Particulars	₹
To Stock A/c		5,000	By Land	20,000
To Prov. for bad and doubtful		3,000
To Amal's Cap A/c	7,000
To Vimal's Cap A/c	5,000	12,000
		20,000		20,000

 

Dr.	Capital Account						Cr.
Particulars	Amal	Vimal	Nirmal	Particulars	Amal	Vimal	Nirmal
To Balance c/d	91,000	65,000	30,000	By Balance b d	70,000	50,000	-
				By Profit and Loss A/c	14,000	10,000	-
				By Revaluation A/c	7,000	5,000	-
				By Bank A/c	-	-	30,000
	91,000	65,000	30,000		91,000	65,000	30,000
				By Balance b/d	91,000	65,000	30,000