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

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.

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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

Concept: Preparation of Revaluation Account and Balance Sheet
  Is there an error in this question or solution?
2015-2016 (March) Delhi Set 3

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.


Ashok, Bhim and Chetan were partners in a firm sharing profits in the ratio of 3:2:1.

Their Balance Sheet as on 31-3-2015 was as follows:

                                      Balance Sheet of Ashok, Bhim and Chetan

                                                         as on 31-3-2015

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

Creditors

Bills Payable

General Reserve

Capitals

        Ashok                2,00,000

        Bhim                  1,00,000

        Chetan                  50,000

1,00,000

40,000

60,000

 

 

 

3,50,000

Land

Building

Plant

Stock

Debtors

Bank

 

1,00,000

1,00,000

2,00,000

80,000

60,000

10,000

 

  5,50,000   5,50,000

 

Ashok, Bhim and Chetan decided to share the future profits equally, w.e.f. April 1, 2015. For this it was agreed that:

(i) Goodwill of the firm be valued at 3,00,000

(ii) Land be revalued at 1, 60,000 and building be depreciated by 6%.

(iii) Creditors of 12,000 were not likely to be claimed and hence be written off

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

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


X, Y and Z were partners in a firm sharing profit’s in the firm of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:

                                   Balance sheet of X,Y and Z as on 31st march,2015

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

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       X                            50,000

       Y                             40,000

       Z                            20,000

 

21,000

10,000

40,000

 

 

 

1,10,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         40,000

      Less:                         3,000

Cash

62,000

20,000

19,000

12,000

15,000

 

37,000

16,000 

  1,81,000   1,81,000

On the above date Y retired and X and Z agreed to continue the business on the following terms:

(1) Goodwill of the firm was valued at Rs.51,000

(2) There was a claim of 4,000 for Workmen’s Compensation.

(3) Provision for bad debts was to be reduced by 1,000

(4) Y will be paid 8,200 in cash and the balance will be transferred in his loan account which will be paid in four equally yearly instalments together with interest @ 10% p.a.

(5) The new profit sharing ratio between X and Z will be 3:2 and their capitals will be in their new profit sharing ratio. The Capital adjustments will be done by opening current Accounts

Prepare Revaluation Account. Partner’s Capital Accounts and the Balance Sheet of reconstituted firm.


J, H and K 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 J,H and K as on 31-3-2015

LIabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       J                            1,00,000

       H                             80,000

       K                             40,000 

 

42,000

20,000

80,000

 

 

 

2,20,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         80,000

      Less:                         6,000  

Cash

2,24,000

40,000

38,000

24,000

30,000

 

74,000

32,000

  3,62,000   3,62,000

On the above data H retires and J and K agreed to continue the business on the following terms:

(i) Goodwill of the firm was valued at Rs.1,02,000.

(ii) There was a claim of Rs.8,000 for workmen's compensation.

(iii) Provision for bad debts was to be reduced by Rs.2,000.

(iv) H will be paid Rs.14,000 in cash and the balance will be transferred in his loan account which will be paid in four equal yearly installments together with interest @ 10% p.a.

(v) The new profit sharing ratio between J and K will be 3:2 and their capitals will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.

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


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.


Om, Ram and Shanti were partners in a firm sharing profits in the ratio of 3:2:1. On 1st April 2014 their Balance Sheet was as follows:

Balance Sheet
Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Accounts

      Om         3,58,000

      Ram        3,00,000

     Shanti      2,62,000

General Reserve

Creditors

Bills payable

 

 

 

9,20,000

48,000

1,60,000

90,000

Land and Building

Plant and Machinery

Furniture

Bills Receivables

Sundry Debtors

Stock

Bank

3,64,000

2,95,000

2,33,000

38,000

90,000

1,11,000

87,000

  12,18,000   12,18,000

On the above date Hanuman was admitted on the following terms:

1) He will bring Rs 1,00,000 for his capital and will get the 1/10th share in the profits.

2) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was valued at Rs 3,00,000

3) A liability of Rs 18,000 will be created against bills receivables discount

4) The value of stock and furniture will be reduced by 20%.

]5) The value of land and building will be increased by 10%.

6) Capital accounts of the partners will be adjusted on the basis of Hanuman's capital in their profit sharing ratio by opening current accounts.

Prepare Revaluation Account and Partner's Capital Accounts.


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


Shikhar and Rohit were partners in a firm sharing profit in the ratio 7:3. On 1st April 2013, they admitted Kavi as a new partner for a ¼ share in the profit of the firm. Kavi brought Rs 4,30,000 as his capital and Rs 25,000 for his share of goodwill premium. The Balance Sheet of Shikhar and Rohit as on 1st April 2013 was as follows:

Balance Sheet of Shikhar and Rohit as on 1st April 2013
Liabilities Rs Assets Rs

Capital:

   Shikhar          8,00,000

   Rohit             3,50,000

General Reserve

Workman’s Compensation Fund

Creditors

 

 

11,50,000

1,00,000

1,00,000

1,50,000

Land and Building

Machinery

Debtors                2,20,000

Less: Provision        20,000

Stock

Cash

3,50,000

4,50,000

 

2,00,000

3,50,000

1,50,000

  15,00,000   15,00,000

It was agreed that:

1. The value of Land and Building will be appreciated by 20%.
2. The value of Machinery will be depreciated by 10%.
3. The liabilities of Workmen's Compensation Fund was determined at Rs 50,000.
4. Capitals of Shikhar and Rohit will be adjusted on the basis of Kavi's capital and actual cash to be brought in or to be paid off as the case may be.

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


L, M and N were partners in firm sharing profits in the ratio of 2:1:1. On 15' April 2013 their Balance Sheet as follows:

Balance Sheet of L, M and N as on 1st April 2013
Liabilities Rs Assets Rs

Capital:

    L             6,00,000

    M             4,80,000

    N             4,80,000

General Reserve

Workman’s Compensation Fund

Creditors

 

 

 

 

15,60,000

4,40,000

3,60,000

2,40,000

 

Land

Building

Furniture

Debtors             4,00,000

Less: Provision      20,000

Stock

Cash

 

8,00,000

6,00,000

2,40,000

 

3,80,000

4,40,000

1,40,000

 

  26,00,000   26,00,000

On the above date, N retired

The following were agreed:

i. Goodwill of the firm was valued at Rs 6,00,000.
ii. The land was to be appreciated by 40% and Building was to be depreciated by Rs 1,00,000. Furniture was to be depreciated by Rs 30,000.
iii. The liabilities for Workmen's Compensation Fund was determined at Rs 1,60,000.
iv. The amount payable to N was transferred to his loan account.
v. Capitals of L and M were to be adjusted in their new profit sharing ratio and for this purpose current accounts of the partners will be opened.

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


Sahaj and Nimish are partners in a firm. They share profits and losses in the ratio of 2: 1. Since both of them are specially abled, sometimes they find it difficult to run the business on their own. Gauri, a common friend decides to help them. Therefore, they admitted her into a partnership for a 1/3rd share. She brought her share of goodwill in cash and proportionate capital. At the time of Gauri's admission, the Balance sheet of Sahaj and Nimish was as under:

Liabilities     Rs Assets Rs

Capital Accounts:

Sahaj             1,20,000

Nimish              80,000

General Reserve

Creditors

Employee's Provident Fund

 

 

2,00,000

30,000

30,000

40,000

Machinery

Furniture

Stock

Sundry Debtors

Cash

 

1,20,000

80,000

50,000

30,000

20,000

 

  3,00,000   3,00,000

It was decided to:

a. Reduce the value of a stock by `5,000.

b. Depreciate furniture by 10% and appreciate machinery by 5%.

c. Rs 3,000 of the debtors proved bad. A provision of 5% was to be created on Sundry Debtors for doubtful debts.

d. Goodwill of the firm was valued at Rs 45,000.

Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the reconstituted firm. Identify the value being conveyed in the question.


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: 

                                         Balance Sheet of N, S and G

                                                 as on 31.3.2016

       Liabilities

Amount

(Rs)

             Assets

Amount

(Rs)

Creditors

1,65,000

Cash

1,20,000

General Reserve

90,000

Debtors

1,35,000

 

Capitals:

 

Less Provision

15,000

1,20,000

N

2,25,000  

Stock

1,50,000

S

3,75,000  

Machinery

4,50,000

G

4,50,000 10,50,000

Patents

90,000

 

 

Building

3,00,000

 

 

Profit & Loss Account

75,000

 

13,05,000

 

13,05,000

 

 

 

G retired on the above date and it was agreed that:
(i) Debtors of Rs 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(ii) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(iii) An unrecorded creditor of Rs 30,000 will be taken into account.
(iv) N and S will share the future profits in the ratio of 2 : 3 ratio.
(v) Goodwill of the firm on G’s retirement was valued at Rs 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement.


Verma and Sharma were partners sharing profits in the ratio of 3 : 1. On 31-3-2011 their Balance

Sheet was as follows:

                   Balance Sheet of Verma and Sharma

                                 as on 31-3-2011

      Liabilities

Amount

Rs

     Assets

Amount

Rs

Capitals:

 

Land and Building

70,000

Verma

1,20,000

 

Machinery

60,000

Sharma

80,000

2,00,000

Debtors

80,000

Creditors

70,000

Bank

60,000

 

 

 

 

 

 

 

 

 

2,70,000

 

2,70,000

 

 

 

The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as follows:

(i) Creditors of Rs 50,000 took over Land and Building in full settlement of their claim.

(ii) Remaining Creditors were paid in cash.

(iii) Machinery was sold at a depreciation of 30%.

(iv) Debtors were collected at a cost of Rs 500.

(v) Expenses of realisation were Rs 1,700.

Pass necessary Journal Entries for dissolution of the firm. 

 


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.


Achla and Bobby were partners in a firm sharing profits and losses in the ratio of 3: 1. On 31st March 2019, their balance sheet was as follows:

Balance Sheet of Achla and Bobby as on 31st March 2019

Liabilities 

Amount(₹)

Assets

Amount(₹)

Creditors

1,10,000

Cash at bank

60,000

General Reserve

40,000

Debtors

40,000

Workmen's compensation reserve

50,000

Stock

45,000

Capitals :

 

Furniture

1,55,000

Achla - 4,00,000

 

Land & Building  

5,00,000

Bobby - 2,00,000

6,00,000

 

 

 

8,00,000

 

8,00,000

On 1st April 2019, they admitted Vihaan as a new partner for 1/5th share in the profits of the firm on the following terms:
(a) Vihaan brought ₹ 1,00,000 as his capital and the capitals of Achla and Bobby were to be adjusted on the basis of Vihaan's capital; any surplus or deficiency was to be adjusted by opening current accounts.
(b) Goodwill of the firm was valued at ₹ 4,00,000. Vihaan brought the necessary amount in cash for his share of goodwill premium, half of which was withdrawn by the old partners.
(c) Liability on account of workmen's compensation amounted to ₹ 80,000.
(d) Achla took overstock at ₹ 35,000.
(e) Land and building was to be appreciated by 20%.

Prepare Revaluation Account, Partner's Capital Accounts, and the Balance Sheet of the reconstituted firm on Vihaan's admission.


Which of the following transactions is debited to Revaluation Account?


X and Y were partners in the profit-sharing ratio of 3 : 2. Their balance sheet as at March 31, 2022 was as follows:

Balance Sheet as at March 31, 2022
Liabilities   Amount (₹) Assets   Amount (₹)
Creditors   56,000 Plant and Machinery   70,000
General Reserve   14,000 Buildings   98,000
Capital Accounts:     Stock   21,000
X 1,19,000 2,31,000 Debtors 42,000 35,000
Y 1,12,000 (-) Provision 7,000
      Cash in Hand   77,000
    3,01,000     3,01,000

Z was admitted for 1/6th share on the following terms:

  1. Z will bring ₹ 56,000 as his share of capital but was not able to bring any amount to compensate the sacrificing partners.
  2. Goodwill of the firm is valued at ₹. 84,000.
  3. Plant and Machinery were found to be undervalued by ₹ 14,000 Building was to be brought up to ₹ 1,09,000.
  4. All debtors are good.
  5. Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current accounts.

You are required to prepare revaluation account and partners’ capital account.


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