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प्रश्न
P and Q are partners sharing profits in 3 : 1. R is admitted and the partners decide to share the future profits in the ratio of 2 : 1 : 1. The Balance Sheet of P and Q as at 31st March, 2024 was as under:
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 30,000 | Bank | 15,000 | ||
| Profit & Loss Account | 60,000 | Debtors | 60,000 | ||
| Capital A/cs: | 5,70,000 | Stock | 1,50,000 | ||
| P | 3,50,000 | Prepaid Expenses | 20,000 | ||
| Q | 2,20,000 | Plant & Machinery | 1,40,000 | ||
| Premises | 2,75,000 | ||||
| 6,60,000 | 6,60,000 |
It was decided that:
- Part of the stock, which has been included at a cost of ₹ 8,000 had been badly damaged in storage and could realise only ₹ 2,000.
- A bill for ₹ 7,000 for electric charges has been omitted to be recorded.
- Plant & Machinery was found overvalued by ₹ 20,000. Premises be appreciated to ₹ 3,00,000.
- Prepaid expenses will be brought down to 40%.
- R’s share of goodwill is valued at ₹ 20,000 but he is unable to bring it in cash.
- R brings in capital proportionate to his share of profit in the firm.
Prepare the Revaluation A/c, Capital A/cs and the opening Balance Sheet.
Hints:
| (1) | Entry for Stock: | |||
| Revaluation A/c ...Dr. | 6,000 | |||
| To Stock A/c | 6,000 |
(2) Since R is unable to bring in goodwill in cash, his Current A/c will be debited instead of his Capital A/c with the amount of goodwill. Following entry will be passed for it: R’s Current A/c
| R’s Current A/c ...Dr. | 20,000 | |||
| To P’s Capital A/c | 20,000 |
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उत्तर
| Dr. | Revaluation Account | Cr. | |||
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| To Stock A/c | 6,000 | By Premises A/c | 25,000 | ||
| To Outstanding Electric Charges A/c | 7,000 | To Loss on Revaluation transferred to: | 20,000 | ||
| To Plant & Machinery A/c | 20,000 | P’s Capital A/c | 15,000 | ||
| To Prepaid expenses | 12,000 | Q’s Capital A/c | 5,000 | ||
| 45,000 | 45,000 | ||||
| Dr. | Partners’ Capital Accounts are | Cr. | |||||
| Particulars | P (₹) | Q (₹) | R (₹) | Particulars | P (₹) | Q (₹) | R (₹) |
| To Revaluation | 15,000 | 5,000 | By Balance b/d | 3,50,000 | 2,20,000 | ||
| To Balance c/d | 4,00,000 | 2,30,000 | 2,10,000 | By Profit & Loss A/c | 45,000 | 15,000 | |
| By R’s Current A/c | 20,000 | ||||||
| By Bank A/c | 2,10,000 | ||||||
| 4,15,000 | 2,35,000 | 2,10,000 | 4,15,000 | 2,35,000 | 2,10,000 | ||
| Balance Sheet | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 30,000 | Bank | 2,25,000 | ||
| Electric Charges | 7,000 | Debtors | 60,000 | ||
| Capital A/cs: | 8,40,000 | Stock | 1,44,000 | ||
| P | 4,00,000 | Prepaid Expenses | 8,000 | ||
| Q | 2,30,000 | Plant & Machinery | 1,20,000 | ||
| R | 2,10,000 | Premises | 3,00,000 | ||
| R’s Current A/c | 20,000 | ||||
| 8,77,000 | 8,77,000 | ||||
Working Note:
Prepaid Expenses:
The value is brought down to 40% of its original value.
= `20,000 xx 40/100`
= 8,000
= 20,000 − 8,000
= 12,000
Old Partner’ Goodwill Sacrifice:
P’s sacrifice = `3/4 - 2/4`
= `1/4`
Q’cs sacrifice = `1/4 - 1/4`
= 0
R’s Capital:
Adjusted capital P and Q = 4,00,000 + 2,30,000
= 6,30,000
Combined share of P = `3/4`.
New firm’s total capital = `6,30,000 xx 4/3`
= 8,40,000
R’s new share = `8,40,000 xx 1/4`
= 2,10,000
