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 - Accountancy

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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.

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Solution

                                                                        Revaluation Account

Dr.                                                                                                                                                      Cr.

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

To Claim for Workman Compensation

 

 

 

 

12,000

 

 

 

 

By Provision for Doubtful Debts

By Loss on Revaluation

             A’s Capital A/c           4,500

             B’s Capital A/c           2,700

             C’s Capital A/c           1,800

3,000

 

 

 

9,000

  12,000   12,000

 

Partner’s Capital Account

Dr.                                                                                                                                                                                                             Cr.

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

Revaluation A/c

B’s Capital A/c

Cash A/c

B’s Loan A/c

Balance c/d

4,500

15,300

 

 

2,05,200

2,700

 

24,600

1,83,600

 

1,800

30,600

 

 

57,600

Balance b/d

IFF

P&L A/c

A’s Capital

C’s Capital

1,50,000

15,000

60,000

 

 

1,20,000

9,000

36,000

15,300

30,600

60,000

6,000

24,000

 

 

  2,25,000 2,10,900 90,000   2,25,000 2,10,900 90,000

Current A/c

Balance c/d

47,520

1,57,680

 

 

 

1,05,120

Balance b/d

Current A/c

2,05,200

 

 

 

57,600

47,520

  2,05,200   1,05,120   2,05,200   1,05,120

 

                                                                   Balance Sheet

                                                               as on March 31,2015

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

Creditors

Capitals

     A                                1,57,680

     C                                1,05,120

                                     ___________

A’s Current A/c

Claim for Workmen Comp.

B’s Loan A/c

 

 

63,000

 

 

 

2,62,800

47,520

12,000

1,83,600

 

 

Land and Building

Motor Vans

Investment

Machinery

Stock

Debtors                               1,20,000

Less : Provision                         6,000

                                             _______

Cash (32,000 – 14,000)

K’s Current A/c

1,86,000

60,000

57,000

36,000

45,000

 

 

1,14,000

23,400

47,520

  5,68,920   5,68,920

Working Notes : 

WN1: Calculation of Gaining Ratio

Gaining Ratio = New Ratio - Old Ratio

A's = (3/5) - (5/10) = 1/10

C's = (2/5) - (2/10) = 2/10

Gaining Ratio = 1:2

WN 2 : Adjustment of Goodwill

B's Share of Goodwill = 1,53,000 x (3/10) = 45,900

45,900 will be debited to gaining partners (A and C) in the ratio of 2:1

A's share = 45,900 x (1/3) = 15,300

C's share = 45,900 x (2/3) = 30,400

WN 3 Adjustment of Capital

Adjusted Capital of A = 1, 50,000 + 15,000 + 60,000 – 4,500 – 15,300 = 2,05,200

Adjusted Capital of C = 60,000 + 6,000 + 24,000 – 1,800 – 30,600 = 57,600

Total Adjusted Capital = 2, 05,200 + 57,600 = 2, 62,800

A's New Capital = 2,62,800 x (3/5) = 1,57,680

C's New Capital = 2,62,800 x (2/5) = 1,05,120

C’s New Capital > C’s Adjusted Capital (C owes 47,520 to the firm)

A’s New Capital < A’s Adjusted Capital (Firm owes 47,520 to A)

WN 4 Amount transferred to B’s Loan A/c

Amount to be transferred = (Credit side – Debit side) – Cash paid

                                      = (2,10,900 – 2,700) – 24,600 = 1,83,600

Concept: Preparation of Revaluation Account and Balance Sheet
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2015-2016 (March) Foreign Set 1

RELATED QUESTIONS

P, Q and R were partners in a firm sharing profits in the ratio of 3:2:1. On 31-3-2015 their Balance Sheet was as follows :

                                     Balance Sheet of P,Q and R as on 31-3-2015

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

Creditors

General Reserve

Capitals

     P                                      1,80,000

     Q                                      1,20,000

     R                                        60,000

 

2,52,000

63,000

 

 

 

3,60,000

 

Bank

Debtors

Stock

Investments

Furniture

Machinery

 

51,000

69,000

3,30,000

90,000

30,000

1,05,000

 

  6,75,000   6,75,000

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

(i) The new profit sharing ratio between P, Q, R and S will be 2:2:1:1.

(ii) Goodwill of the firm was valued at Rs.2, 70,000 and S will bring his share of goodwill premium in cash.

(iii) The market value of investments was Rs.64,000.

(iv) Machinery will be reduced to Rs.87,000.

(v) A creditor of Rs.9,000 was not likely to claim the amount and hence to be written-off.

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

Prepare Revaluation Account. Partners' Capital Accounts and the Balance Sheet of P, Q, R and S.


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


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.


L, M and N were partners in a firm sharing profit in the ratio of 3:2:1. Their Balance Sheet on 31.3.2015 was as follows :

                                          Balance Sheet of L,M and N as on 31-3-2015

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

Creditors

General Reserve

Capitals

     L                               1,20,000

     M                                 80,000

     N                                  40,000 

 

1,68,000

42,000

 

 

 

2,40,000

 

Bank

Debtors

Stock

Investments

Furniture

Machinery

 

34,000

46,000

2,20,000

60,000

20,000

70,000

 

  4,50,000   4,50,000

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

(i) The new profit sharing ratio between L, M, N and 0 will be 2: 2: 1: 1.

(ii) Goodwill of the firm was valued at Rs.1,80,000 and O brought his share of goodwill premium in cash.

(iii) The market value of investments was Rs.36,000.

(iv) Machinery will be reduced to Rs.58,000.

(v) A creditor of Rs.6,000 was not likely to claim the amount and hence to be written-off.

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

Prepare Revaluation Account. Partner's Capital Accounts and the Balance Sheet of the New 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.


Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2:2:3:3. On 1.4.2016 their Balance Sheet was as follows

Balance Sheet of Suresh, Ramesh, Mahesh and Ganesh
as on 1.4.2016
Liabilities Rs Assets Rs

Capitals :

Suresh               1,00,000

Ramesh              1,50,000

Mahesh               2,00,000

Ganesh               2,50,000

Sundry Creditors

Workmen Compensation Reserve

 

 

 

 

7,00,000

1,70,000

75,000

Fixed Assets

Current Assets

 

 

 

 

 

6,00,000

3,45,000

 

 

 

 

 

  9,45,000   9,45,000

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 90,000.

It was also agreed that:

1) Claim against Workmen Compensation Reserve will be estimated at Rs 1,00,000 and fixed assets will be depreciated by 10%.

2) The capitals of the partners will be adjusted according to the new profit sharing ratio. For this, necessary cash will be bought or paid by the partners as the case may be.

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


Under which major headings the following items will be presented in the Balance sheet of a company as per Schedule VI Part I of the Companies Act, 1956?

(1) Loans provided repayable on demand
(2) Goodwill
(3) Copyrights
(4) Loose tools
(5) Cheques
(6) General Reserve
(7) A stock of finished goods and
(8) 9% Debentures repayable after three years


O, R and S were partners in a firm sharing profit in the ratio of 3:2:1 On 1.4.2014 their Balance Sheet was as follows:

Liabilities

Amount

RS

Assets

Amount

Rs

Capital Accounts

       O      1,75,000

       R      1,50,000

       S      1,25,000

Current Accounts

      O    4,000

      S    6,000

General Reserve

Profit and Loss Accounts

Creditors

Bills Payable

 

 

 

4,50,000

 

 

10,000

15,000

7,000

80,000

45,000

R’s Current Accounts

Land and Building

Plant and Machinery

Furniture

Investment

Bills Receivables

Sundry Debtors

Stock

Bank

 

 

7,000

1,75,000

67,500

80,000

36,500

17,000

43,500

1,37,000

43,500

 

 

  6,07,000   6,07,000

On the above date, H was admitted on the following terms:
(i) H will bring Rs 50,000 as his capital and will get 116 th share in the profits.
(ii) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was
valued at Rs 90,000.
(iii) The new profits sharing ratio will be 2:2:1:1.
(iv) A liability of Rs 7,004 will be created against bills receivables discounted.
(v) The value of stock, furniture and investments is reduced by 20% whereas the value of land and building and plant and machinery will be appreciated by 20% and 10% respectively.
(vi) The Capital accounts of the partners will be adjusted on the basis of H's Capital through their
current accounts.
Prepare Revaluation Account and Partner's Current Accounts and Capital Accounts.


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.


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:


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. 

 


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.


Gita, Radha, and Garv were partners in firm sharing profits and losses in the ratio of 3: 5: 2. On 31st March 2019, their balance sheet was as follows: ​

Balance Sheet of Gita, Radha & Garv as on 31st March 2019 

Liabilities 

Amount (₹)

Assets Amount (₹)
Sundry Creditors

60,000

Cash 50,000
General Reserve

40,000

Stock 80,000
Capitals :

 

Debtors 40,000
Gita  -   3,00,000

 

Investments   30,000
Radha - 2,00,000

 

Buildings 5,00,000
Garv -  1,00,000

6,00,000

   
  7,00,000   7,00,000

Radha retired on the above date and it was agreed that:
(a) Goodwill of the firm be valued at ₹ 3,00,000 and Radha's share be adjusted through the capital accounts of Gita and Gary.
(b) Stock was to be appreciated by 20%.
(c) Buildings were found undervalued by ₹ 1,00,000.
(d) Investments were sold for ₹ 34,000.
(e) Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the partners; the necessary adjustments for this purpose were to be made by opening current accounts of the partners.

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


Akul, Bakul, and Chandan were partners in a firm sharing profits in the ratio of 2 : 2: 1. On 31st March 2018 their Balance Sheet was as follows:

Balance Sheet of Akul, Bakul and Chandan as on 31.3.2018 

Liabilities

Amount (₹)

Assets Amount (₹)
Sundry Creditors 45,000 Cash at Bank 42,000
Employees Provident Fund  13,000 Debtors           60,000  
General Reserve 20,000 Less: Provision for doubtful debts   2000 58,000
Capitals:      
Akul              1,60,000   Stock 80,000
Bakul            1,20,000   Furniture 90,000
Chandan         92,000 3,72,000 Plant and Machinery 1,80,000
  4,50,000   4,50,000

Bakul retired on the above date and it was agreed that:
(i) Plant and Machinery were undervalued by 10%.
(ii) Provision for doubtful debts was to be increased to 15% on debtors.
(iii) Furniture was to be decreased to ₹ 87,000.
(iv) Goodwill of the firm was valued at ₹ 3,00,000 and Bakul's share was to be adjusted through the capital accounts of Akul and Chandan.
(v) Capital of the new firm was to be in the new profit sharing ratio of the continuing partners.
Prepare Revaluation account, Partners' Capital accounts, and the Balance Sheet of the reconstituted firm.


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.


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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