Question

Anita and Anil are partners in a firm. On 1st April, 2024, they admitted Jia as a third partner. The capital accounts of the partners after considering the following adjustments on Jia’s admission are given below:

1. Loss on revaluation due to depreciation on machinery @ 20% per annum.
2. The General Reserve maintained in the old firm was not to be disturbed in the reconstituted firm.

Dr.	Partners’ Capital Accounts						Cr.
Particulars	Anita (₹)	Anil (₹)	Jia (₹)	Particulars	Anita (₹)	Anil (₹)	Jia (₹)
To Goodwill A/c	10,000	10,000		By Balance b/d	90,000	80,000
To P & L A/c	5,000	5,000		By Bank A/c			75,000
To Revaluation A/c	7,500	7,500		By Premium for Goodwill A/c	25,000	25,000
To Balance c/d	1,17,500	1,07,500	75,000	By Jia’s Current A/c	25,000	25,000
	1,40,000	1,30,000	75,000		1,40,000	1,30,000	75,000

Additional information:

On 31st March, 2024, the firm of Anita and Anil, apart from plant and machinery and a bank balance of ₹ 2,15,000, had no other asset.

You are required to prepare the Balance Sheet of the reconstituted firm on the date of Jia’s admission after considering the information given above.

Answer 1

Balance Sheet of as on 1st April, 2024
Liabilities	Amount (₹)	Amount  (₹)	Assets	Amount (₹)	Amount  (₹)
Capital Accounts:		3,00,000	Cash at Bank		3,40,000
Anita	1,17,500		Plant and Machinery		60,000
Anil	1,07,500		Jia’s Current A/c		50.000
Jia	75,000
General Reserve		1,50,000
		4,50,000			4,50,000

Working Notes:

(1) Value of Machinery = `15,000 xx 100/20`

= ₹ 75,000

Present Value = 75,000 − 15,000

= ₹ 60 000

(2) Jia is given `1/3`rd share of profits and amount credited to Anita’s and Anil’s Capital Accounts in respect of the adjustment of the general reserve is 25,000 + 25,000

= ₹ 50,000

Amount of General Reserve = 50,000 × 3

= ₹ 1,50,000

(3) Barik Balance (after reconstitution)

= ₹ 2,15,000 + Capital brought in by Jia + Premium contributed in cash

= ₹ 2,15,000 + ₹ 75,000 + 50,000

= ₹ 3,40,000