A, B and C Were Partners in a Firm Sharing Profit in the Ratio of 3:2:1. on 31-3-2015 Their Balance Sheet Was as Follows - Accountancy

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A, B and C were partners in a firm sharing profit in the ratio of 3:2:1. 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

General Reserve

 

Capitals

    A                       60,000

    B                       40,000

    C                       20,000

84,000

21,000

 

 

 

 

1,20,000

Bank

Debtors

Stock

Investments

Furniture & Fittings

Machinery

 

17,000

23,000

1,10,000

30,000

10,000

35,000

 

  2,25,000   2,25,000

On the above date D was admitted as new partner and it was decided that

(i) The new profit sharing ratio between A, B, C and D will be 2:1:1:1.

(ii) Goodwill of the firm was valued at Rs.90,000 and D brought his share of goodwill premium in cash.

(iii) The Market value of investments was Rs.24,000

(iv) Machinery will be reduced to Rs.29,000

(v) A Creditor of Rs.3,000was not likely to claim the amount and hence to be written off.

(vi) D will bring proportionate capital so as to give him 1/6th share in the profits of the firm.

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

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Solution

                                                       Revaluation Account

Dr.                                                                                                                                             Cr.

Particulars Amount(Rs.) Particulars Amount(Rs.)

To Investments A/c

To Machinery A/c

 

 

 

 

 

6,000

6,000

 

 

 

 

 

By Creditors A/c

 

By Loss on Revaluation A/c

    A’s Capital A/c              4,500

    B’s Capital A/c              3,000

    C’s Capital A/c              1,500

 

3,000

 

 

 

 

9,000

 

  12,000   12,000

 

                                                                                       Partner’s Capital Account

Dr.                                                                                                                                                                                        Cr.

Particulars A (Rs.) B (Rs.) C (Rs.) D (Rs.) Particulars A (Rs.) B (Rs.) C (Rs.) D (Rs.)

Reval A/c

Balance c/d

 

 

4,500

81,000

 

 

3,000

44,000

 

 

1,500

22,000

 

 

 

29,400

 

 

Balance c/d

Gen. Reserve

Prem. for G/w

Cash A/c

60,000

10,500

15,000

 

40,000

7,000

 

 

20,000

3,500

 

 

 

 

 

29,400

  85,500 47,000 23,500 29,400   85,500 47,000 23,500 29,400

 

                                                                  Balance Sheet

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

Creditors

 

Capitals :

   A                                     81,000

   B                                     44,000

   C                                     22,000

   D                                     29,400

 

 

81,000

 

 

 

 

 

1,76,400

 

 

Bank (17,000 + 29,400 + 15,000)

Debtors

Stock

Investments

Furniture & Fittings

Machinery

 

 

61,400

23,000

1,10,000

24,000

10,000

29,000

 

 

  2,57,400   2,57,400

 

Working Notes :

WN 1: Calculation of Sacrificing Ratio

Sacrificing Ratio = Old Ratio - New Ratio

A's = (3/6) - (2/6) = 1/6

B's = (2/6) - (2/6) = Nil

C's = (1/6) - (1/6) = Nil

 

WN 2: Adjustment of Goodwill

D's Share of Goodwill = 90,000 x (1/6) = 15,000

15,000 will be credited to A's Capital A/c, as he is the only sacrificing partner

 

WN 3: Calculation of D’s Proportionate Capital

Adjusted Old Capital of A = 60,000 + 10,500 + 15,000 - 4,500 = 81,000

Adjusted Old Capital of B = 40,000 + 7,000 - 3,000 = 44,000

Adjusted Old Capital of C = 20,000 + 3,500 - 1,500 = 22,000

Total Adjusted Capital = 81,000 + 44,000 + 22,000 = 1, 47,000

D’s Proportionate Capital = Total Adjusted Capital x D’s Profit Share x Reciprocal of Combined New Share of Old Partners

                                     = 1,47,000 x (1/6) x (6/5)

                                      = 29,400

Concept: Preparation of Revaluation Account and Balance Sheet
  Is there an error in this question or solution?
2015-2016 (March) Delhi Set 1

RELATED QUESTIONS

Ajay, Aman and Anand were partners in a firm sharing profits in the ratio of 5:1:4. Their Balance Sheet as on 31-3-2015 was as follows :

                                              Balance Sheet of Ajay,Aman and Anand as on 31-3-2015

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

Creditors

Bills Payable

General Reserve

Capitals

      Ajay                                      5,00,000

      Aman                                     1,00,000

      Anand                                    1,60,000

1,47,000

33,000

2,10,000

 

 

 

7,60,000

Land

Building

Plant

Stock

Debtors

Bank

 

5,40,000

2,70,000

1,90,000

75,000

60,000

15,000

 

  11,50,000   11,50,000

From 1-4-2015 Ajay. Aman and Anand decided to share future profits equally. For this it was agreed that:

(i) Goodwill of the firm be valued at Rs1, 80,000.

(ii) Land be revalued at Rs.6,00,000 and building be depreciated by 10%.

(iii) Creditors of Rs.15,000 were not likely to be claimed and hence be written-off.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the 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.


R, S and T 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 A,B and C as on 31-3-2015

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

Creditors

Bills Payable

General Reserve

Capitals

    R                                1,00,000

    S                                   50,000

    T                                    25,000

50,000

20,000

30,000

 

 

 

1,75,000

Land

Building

Plant

Stock

Debtors

Bank

 

50,000

50,000

1,00,000

40,000

30,000

5,000

 

  2,75,000   2,75,000

R,S and T decided to share the profits equally with effects from 1.4.2015. For this it was agreed that:

(a) Goodwill of the firm will be valued at Rs.1,50,000

(b) Land will be revalued at Rs.80,000 and building be depreciated by 6%.

(c) Creditors of Rs.6,000 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.


Mohan and Mahesh were partners in a firm sharing profit in the ratio 3:2. On 1st April 2012, they admitted Nusrat as a partner in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under:

Balance Sheet of Mohan and Mahesh as on 1st April 2012

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

Creditors

Workman’s Compensation Fund

General Reserve

Capital:

       Mohan                     1,00,000

       Mahesh                       80,000

 

2,10,000

2,50,000

1,60,000

 

 

1,80,000

 

Cash in hand

Debtors

Stock

Machinery

Building

 

 

1,40,000

1,60,000

1,20,000

1,00,000

2,80,000

 

 

  8,00,000   8,00,000

It was agreed that:

i. The value of Building and Stock be appreciated to Rs.3,80,000 and Rs.1,60,000 respectively.

ii. The liabilities of workmen's compensation fund was determined at Rs.2,30,000.

iii. Nusrat brought in her share of goodwill Rs.1,00,000 in cash.

iv. Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustments are carried out.

v. The future profit sharing ratio will be Mohan 2/5, Mahesh 2/5, Nusrat 1/5.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. Also show clearly the calculation of Capital brought by Nusrat.


Kushal Kumar and Kavita were partners in a firm sharing profit in the ratio 3:1:1. On 1st April 2012 their Balance Sheet was as follows:

Balance Sheet of Kushal, Kumar and Kavita as on 1st April 2012

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

Creditors

Bill payable

General Reserve

Capital:

       Kushi       3,00,000

       Kumar     2,80,000

       Kavita     3,00,000  

1,20,000

1,80,000

1,20,000

 

 

 

8,80,000

Cash

Debtors               2,00,000

  Less: Provision    10,000  

Stock

Furniture

Building

Land

70,000

 

1,90,000

2,20,000

1,20,000

3,00,000

4,00,000

  13,00,000   13,00,000

On the above date, Kavita retired and the following was agreed:

i. Goodwill of the firm was valued at Rs.40,000.

ii. The land was to be appreciated by 30% and the building was to be depreciated by Rs.1,00,000.

iii. Value of furniture was to be reduced by Rs.20,000.

iv. Bad debts reserve is to be increased to Rs.15,000.

v. 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.

vi. Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.

Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita's retirement.


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.


A, B and C were partners in a firm sharing profit in the ratio of 3:2:1. 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

Bills Payable

 

Capitals

    A                                    1,00,000

    B                                       50,000

    C                                       25,000      

General Reserve

50,000

20,000

 

 

 

 

1,75,000

30,000

Land

Building

Plant

Stock

Debtors

Bank

 

 

50,000

50,000

1,00,000

40,000

30,000

5,000

 

 

   2,75,000    2,75,000

On the above date D was admitted as new partner and it was decided that: 

(i) Goodwill of the firm will be valued at 1,50,000

(ii) Land will be revalued at 80,000 and building be depreciated by 60%.

(iii) Creditors of 6,000 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.


Chander and Damini were partners in a firm sharing profits and losses equally. On 31st March 2017 their Balance Sheet was as follows:

Balance Sheet of Chander and Damini

as on 31.3.2017

Liabilities

Amount

Rs 

Assets

Amount

Rs

Sundry Creditors

Capitals:

      Chander    2,50,000

      Damini      2,16,000

 

 

 

1,04,000

 

 

4,66,000

 

Cash at Bank

Bills Receivable

Debtors

Furniture

Land and Building 

 

 

30,000


45,000

75,000

1,10,000

3,10,000

5,70,000 5,70,000
   

On 1.4.2017, they admitted Elina as a new partner for `1/3` rd share in the profits on the following conditions:

1) Elina will bring Rs 3,00,000 as her capital and Rs 50,000 as her share of goodwill premium, half of which will be withdrawn by Chander and Damini.

2) Debtors to the extent of Rs 5,000 were unrecorded.

3) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be created on bills receivables and debtors.

4) Value of land and building will be appreciated by 20%.

5) There is a claim against the firm for damages, a liability to the extern of Rs 8,000 will be created for the same.

Prepare Revaluation Account and Partners Capital Accounts.


Kapil, Mohit, Roshan and Rakesh were partners in firm sharing profits in the ratio of 5:2:2:1. On 1.4.2016 their Balance Sheet was as follows :

Balance Sheet of Kapil, Mohit, Roshan and Rakesh
as on 1.4.2016
Liabilities Rs Assets Rs

Capitals :

Kapil        3,50,000

Mohit       3,00,000

Roshan    2,50,000

Rakesh    2,00,000

Sundry Creditors

Workmen Compensation Reserve

 

 

 

 

11,00,000

50,000

50,000

Fixed Assets

Current Assets

 

 

 

 

 

8,00,000

4,00,000

 

 

 

 

 

  12,00,000   12,00,000

From the above date, the partners decided to share the future profits equally. For this purpose, the goodwill of the firm was valued at Rs 72,000. It was also agreed that:

1) Fixed assets will be depreciated by 10% and the claim against Workmen Compensation Reserve will be estimated at Rs 70,000.

2) The Capitals of the partners will be adjusted according to their new profit sharing ratio. For this, Partners' Current Accounts will be opened

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.


Charu and Harsha were partners in a firm sharing profits in the ratio of 3:2. On 1-4-2014 their Balance Sheet was as follows :

Balance Sheet
Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

General Reserve

Workmen Compensation Fund

Investment Fluctuation Fund

Provision for bad debts

Capitals

   Charu    30,000

   Harsha   20,000

17,000

4,000

9,000

11,000

2,000

 

 

50,000

Cash

Debtors

Investments

Plant

Land and building

 

 

 

6,000

15,000

20,000

14,000

38,000

 

 

 

  93,000   93,000

On the above date, Vaishali was admitted for 1/4th share in the profits of the firm on the following terms:

(a) Vaishali will bring Rs 20,000 for her capital and Rs 4,000 for her share of goodwill premium.
(b) All debtors were considered good.
(c) The market value of investments was Rs 15,000.
(d) There was a liability of Rs 6,000 for workmen compensation.
(e) Capital accounts of Charu and Marsha are to be adjusted on the basis of Vaishali's capital by
opening current accounts.

Prepare Revaluation Account and Partners' Capital Accounts


Amit, Balan and Chander were partners in a firm sharing profits in the proportion of `1/2, 1/3 and 1/6`respectively. Chander retired on 1-4-2014. The Balance Sheet of the firm on the date of Chander's retirement was as follows:

Balance Sheet of Amit, Balan and Chander as on 1-4-2014
Liabilities

Amount

Rs

Assets

Amount

Rs

Sundry Creditors

Provident Fund

General Reserve

Capitals

    Amit        40,000

    Balan       36,500

   Chander    2,000

12,600

3,000

9,000

 

 

 

96,500

Bank

Debtors            30,000

Less: Provision    1,000

Stock

Investments

Patents

Machinery

4,100

 

29,000

25,000

10,000

5,000

48,000

  1,21,100   1,21,100

It was agreed that:

(a) Goodwill will be valued at Rs 27,000.
(b) Depreciation of 10% was to be provided on machinery.
(c) Patents were to be reduced by 20%.
(d) Liability on account of Provident Fund was estimated at Rs 2,400.
(e) Chander took over investments for  Rs 15,800.
(f) Amit and Balan decided to adjust their capitals in a proportion of their profit sharing ratio by
opening current accounts.

Prepare Revaluation Account and Partners' Capital Accounts on Chander's retirement.


Xavier, Yusuf and Zaman were partners in a firm sharing profits in the ratio of 4:3: 2. On 1.4.2014 their Balance sheet was as follows:

Liabilities

Amount

Rs

Assets

Amount

Rs

Sundry Creditors

Capital Accounts

    Xavier     1,20,000

    Yusuf        90,000

    Zaman      60,000

 

41,400

 

 

 

2,70,000

 

Cash at Bank

Sundry Debtors                   30,450

    Less: Prov. For Bad debts   1,050

Stock

Plant and Machinery

Land and Building

33,000

 

29,400

48,000

51,000

1,50,000

  3,11,400   3,11,400

Yusuf had been suffering from ill health and thus gave notice of retirement from the firm. An agreement was, therefore, entered into as on 1.4.2014, the terms of which were as follows:

1) That land and building be appreciated by 10%

2) The provision for bad debts is no longer necessary

3) That stock be appreciated by 20%

4) That goodwill of the firm be fixed at Rs 54,000. Yusuf share of the same be adjusted into Xavier's and Zamna's Capital Accounts, who are going to share future profits in the ratio of 2:1

5) The entire capital of the newly constituted firm be readjusted by bringing in or paying necessary cash so that the future capitals of Xavier and Zaman will be in their profit sharing ratio.

Prepare Revaluation Account and Partner's Capital Account


A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. On 1.4.2014 their Balance Sheet was as follows :

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors 

Provident Fund

General Reserve

Capital Accounts

   A   80,000

   B   73,000 

   C   40,000

25,200

3,000

21,000

 

 

 

1,93,000

Bank

Debtors              60,000

   Less: Provision 2,000

Stock

Investment

Patents

Machinery

8,200

 

58,000

50,000

20,000

10,000

96,000

  2,42,200   2,42,200

On the above date, C retired. It was agreed that:
(i) Goodwill of the firm will be valued at Rs 5,400.
(ii) Depreciation of 10% was to be provided on machinery.
(iii) Patents were to be reduced by 20%.
(iv) Liability on account of Provident Fund was estimated at Rs 2,500.
(v) C took over investments for Rs 31,700.
(vi) A and B decided to adjust their capitals in proportion to their profit sharing ratio. For this
purpose, current accounts were opened.
Prepare Revaluation Account and Partners' Capital Accounts on C's retirement


X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    

(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below : 

Dr.

                      Z’s Capital Account

Cr.

 Date

    Particulars

Amount

(Rs)

Date

   Particulars

 Amount

(Rs)

2016

 

 

2016

 

 

Sep. 30

……………

30,000

April 1

……………

80,000

Sep. 30

……………

2,000

Sep. 30

……………

4,800

Sep. 30

……………

……...

Sep. 30

……………

20,000

 

 

 

Sep. 30

……………

……...

 

 

 

Sep. 30

……………

……...

 

 

1,64,800

 

 

1,64,800

 

 

 

 

 

 

 

You are required to complete Z's Capital Account. 


 


Manu, Hary, Ali and Reshma were partners in a firm sharing profits in the ratio of 2 : 2 : 1 : 5. On 1.4.2016 their Balance Sheet was as follows: 

                                 Balance Sheet of Manu, Hary, Ali and Reshma

as on 1.4.2016

           Liabilities

Amount

(Rs)

             Assets

Amount

(Rs)

Capitals:

 

Fixed Assets

8,00,000

Manu

2,00,000

 

Current Assets

2,40,000

Hary

2,50,000

 

 

 

Ali

1,50,000

 

 

 

Reshma

3,50,000 9,50,000

 

 

 

 

 

 

Sundry Creditors

45,000

 

 

Workmen Compensation Reserve

45,000

 

 

 

10,40,000

 

10,40,000

 

 

 

 

From the above date partners decided to share future profits equally. For this purpose the goodwill of the firm was valued at Rs 40,000. The partners also agreed for the following:

(i) Claims against Workmen Compensation Reserve was estimated at Rs 50,000. Fixed assets were to be depreciated by 10%.

(ii) Capitals of the partners were to be adjusted according  to the new profit sharing ratio, for this necessary cash will be brought or paid.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.


A and Z are partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet as on 31.3.2016 was as follows was as follows: 

                                  Balance Sheet of A and Z

                                       as on 31.3.2016

         Liabilities

Amount

(Rs)

              Assets

Amount

(Rs)

Sundry Creditors

60,000

Cash

36,000

Provision for Bad Debts

6,000

Debtors

54,000

Outstanding Wages

9,000

Stock

60,000

General Reserve

15,000

Furniture

1,20,000

 

 

Plant & Machinery

120,000

Capitals:

 

 

 

A

1,20,000

 

 

 

Z

1,80,000

3,00,000

 

 

 

3,90,000

 

3,90,000

 

 

 

On the above date B was admitted for `1/4` share in the profits on the following terms:
(i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be withdrawn by A and Z.
(ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful debts.
(iii) Outstanding wages will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%.

(v) Investments of 7,500 not shown in the Balance Sheet will be reccorded.
(vi) A creditor of Rs 6,300 not recorded in the books was to be taken into account.

Pass necessary journal entries for the above transactions in the books of the firm on B’s admission.
OR

N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under:


Khanna, Seth and Mehta were partners in a firm sharing profit in the ratio of 3 : 2 : 5. On

31.12.2010 the Balance Sheet of Khana, Seth and Mehta was as follows:  

      Liabilities

Amount

Rs

    Assets

Amount

Rs

Capitals:

 

Goodwill

3,00,000

Khanna:

3,00,000

 

Land and Building

5,00,000

Seth:

2,00,000

 

Machinery

1,70,000

Mehta:

5,00,000

10,00,000

Stock

30,000

General Reserve

1,00,0000

Debtors

1,20,000

Loan from Seth

50,000

Cash

45,000

Creditors

75,000

Profit and Loss Account

60,000

 

12,25,000

 

On 14th March 2011, Seth died.

The partnership deed provides that on the death of a partner the executor of the deceased partners

is entitled to:

(i) Balance in Capital Account;

(ii) Share in profits upto the date of death on the basis of last year’s profit;

(ii) His share in profit/loss in revaluation of assets and re-assessment of liabilities which were as follows:

(a) Land and Building was to be appreciated by Rs 1,20,000;

(b) Machinery was to be depreciated to Rs 1,35,000 and stock to Rs 25,000;

(c) A provision of `2 1/2%` for bad and doubtful debts was to created on debtors;

(iv) The net amount payable to Seth’s executors was transferred to his loan account which was to be paid later.

Prepare Revalution Account, Partners Capital Accounts, Seth’s Executors Account and the

Balance Sheet of Khanna and Mehta who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus of deficit to be transferred the current account of the partners. 


The Balance Sheet of Ram and Shyam, who were sharing profits in the ratio of 3 : 1 on 31st March, 2009 was as follows: 

       Liabilities

Amount

Rs

       Assets

Amount

Rs

Creditors

2,800

Cash at bank

2,000

Employees’ provident fund

1,200

Debtors

6,500

 

General Reserve

2,000

Less: Reserve for bad debts

(500)

6,000

Capitals

 

Stock

3,000

Ram

6,000

 

Investments

5,000

Shyam

4,000

10,000

 

 

 

16,000

 

16,000

 

 

 

 


Answer briefly of the following question:

Give any two differences between Revaluation Account and Realisation Account.


Annie and Bonnie are partners in a firm, sharing profits and losses equally. Their Balance Sheet as at 31st March,
2017, was as follows:

                        Balance Sheet of Annie and Bonnie
                               As at 31st March, 2017

Liabilities Amount Rs. Assets AmountRs.
Sundry Creditors           21,000 Cash at Bank 20,000
General Reserve           15,000

Sundry Debtors                   22,000

Less Provision for Doubtful Debts                    (1,000)

 

 

 

21,000

Capital A/c

Annie 45,000

Bonnie40,000

 

 

          85,000

Stock 10,000
    Plant & Machinery 60,000
    Goodwill 10,000
  1,21,000   1,21,000

Carl was to be taken as a partner for 1/4 share in the profits of the firm, with effect from 1st April, 2017, on the
following terms:
(a) Bad debts amounting to Rs. 1,500 to be written off.
(b) Stock to be taken over by Annie at Rs.12,000.

(c) Plant and Machinery to be valued at Rs. 50,000.
(d) Goodwill of the firm to be valued at Rs. 20,000.
(e) Carl to bring in Rs. 50,000 as his capital. He was unable to bring his share of goodwill in cash.
(f) General Reserve not to be distributed. For this, it was decided that Carl would compensate the old partners
through his current account.
You are required to:
(i) Pass journal entries on the date of Carl's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm


Susan, Geeta and Rashi are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2017, is as under:

Balance Sheet of Susan, Geeta and Rashi As at 31st March, 2017

Liabilities Amount Assets Amount
Sundry Creditors          50,000  Cash at Bank 70,000
Workmen Compensation Reserve          25,000 

Sundry Debtor 65,000

Less Provision for Doubtful Debts (5,000

 

 

                     60,000 

Employees Provident Fund           5,000  Goodwill                      50,000 
Bank Loan         55,000  Furniture                   1,00,000 

Capital A/C

Susan                            2,20,000 

Geeta                            1,70,000 

Rashi                             1,35,000 

 

 

 

5,25,000 

Building                   3,80,000 
  6,60,000    6,60,000 

The partners decided to dissolve their partnership on 31st March, 2017. The following transactions took place at the time of dissolution :

(a) Realization expenses of 2,000 were paid by Susan on behalf of the firm.

(b) Geeta took over the goodwill for her own business at  40,000.

(c) Building was taken over by Rashi at 3,00,000.

(d) Only 80% of the debtors paid their dues.

(e) Furniture was sold for  97,000.

(f) Bank Loan was settled along with interest of 5,000. You are required to prepare the Realization Account.


Which of the following transactions is debited to Revaluation Account?


On the date of admission of Ajay as a partner, the Balance Sheet of the firm of Nita and Rita showed a balance of ₹ 80,000 in the Workmen Compensation Reserve. Choose the correct option to record the effect of a workmen compensation claim of ₹ 90,000 on the accounts of the partnership firm.


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