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Question
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.
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Solution
Revaluation Account
Dr. Cr.
| Particulars | Amount(Rs.) | Particulars | Amount(Rs.) |
|
To Building A/c To Revaluation Profit A/c Ajay 24,000 Aman 4,800 Anand 19,200 |
27,000
48,000 |
By Land A/c By Creditors A/c
|
60,000 15,000
|
| 75,000 | 75,000 |
Partner’s Capital Account
Dr. Cr.
| Particulars | Ajay(Rs.) | Aman(Rs.) | Anand(Rs) | Particulars | Ajay(Rs.) | Aman(Rs.) | Anand(Rs) |
|
Ajay’s Capital A/c Anand’s Capital A/c Balance c/d
|
6,59,000
|
30,000 12,000 83,800
|
2,75,200
|
Balance B/d R/V Profit General Reserve Aman’s Cap. A/c |
5,00,000 24,000 1,05,000 30,000 |
1,00,000 4,800 21,000
|
1,60,000 19,200 84,000 12,000 |
| 6,59,000 | 1,25,800 | 2,75,200 | 6,59,000 | 1,25,800 | 2,75,200 |
Balance Sheet
| Liabilities | Amount(Rs.) | Assets | Amount(Rs.) |
|
Capital Ajay 6,59,000 Aman 83,800 Anand 2,75,200 Creditors 1,47,000 Less: Written off 15,000 Bills payable
|
10,18,000
1,32,000 33,000
|
Land 5,40,000 Add: Increase 60,000 Building 2,70,000 Less: Dep 27,000 Plant Bank Stock Debtors |
6,00,000
2,43,000 1,90,000 15,000 75,000 60,000 |
| 11,83,000 | 11,83,000 |
Working Notes :
Old Ratio New Ratio
5:1:4 1:1:1
S/R of Ajay = Old Ratio - New Ratio=`5/10-1/3=5/30=>` Sacrificing
S/R of Aman = Old Ratio - New Ratio =`1/10-1/3=-7/30=>` Gainnig
S/R of Anand = Old Ratio - New Ratio =`4/10-1/3=2/30=>`Sacrificing
Aman will compensate Ajay and Anand
Aman’s Capital A/c Dr 42,000
To Ajay’s Capital A/c 30,000
To Anand’s Capital A/c 12,000
