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.
Solution
Revaluation Account
Dr. Cr
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Building A/c Revaluation Profit A 16,500 B 11,000 C 5,500
|
3,000
33,000
|
Land A/c Creditors A/c
|
30,000 6,000
|
| 36,000 | 36,000 | ||
Partner’s Capital Account
Dr. Cr.
| Particulars |
A Rs |
B Rs |
C Rs |
Particulars |
A Rs |
B Rs |
C Rs |
|
A’s Capital A/c
Balance c/d
|
1,56,500 |
71,000 |
25,000
10,500 |
Balance B/d R/V Profit General Reserve C’s Capital A/c
|
1,00,000 16,500 15,000 25,000 |
50,000 11,000 10,000
|
25,000 5,500 5,000
|
| 1,56,500 | 71,000 | 35,500 | 1,56,500 | 71,000 | 35,500 | ||
Balance Sheet
| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Capital A 1,56,500 B 71,000 C 10,500
Creditors 50,000 Less : Written off 6,000
Bills payable
|
2,38,000
44,000
20,000
|
Land 50,000 Add :Increase 30,000 Building 50,000 Less : Dep 3,000
Plant Bank Stock Debtors |
80,000
47,000
1,00,000 5,000 40,000 30,000 |
| 3,02,000 | 3,02,000 |
Working Notes
Old Ratio New Ratio
3 : 2 : 1 1:1:1
S/R of A = Old Ratio - New Ratio `=3/6-1/3=1/6=>`
S/R of B = Old Ratio - New Ratio =`2/6-1/3=0/6`
S/R of C = Old Ratio - New Ratio = `1/6-1/3=-1/6=>`
C will compensate Ashok, since he is gaining
C’s Capital A/c Dr 25,000
To A’s Capital A/c 25,000
