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Question
Anuj, Divij and Shilpa were partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. Their Balance Sheet as at 31st March, 2023 was as follows:
| Balance Sheet of Anuj, Divij and Shilpa as at 31st March, 2023 | ||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) |
| Capitals: | 12,00,000 | Land & Building | 8,00,000 | |
| Anuj | 3,00,000 | Furniture | 2,40,000 | |
| Divij | 4,00,000 | Stock | 1,20,000 | |
| Shilpa | 5,00,000 | Debtors | 1,70,000 | |
| Bills Payable | 60,000 | Cash | 50,000 | |
| Creditors | 1,20,000 | |||
| 13,80,000 | 13,80,000 | |||
Anuj retired on the above date on the following terms:
- Anuj’s share of goodwill was valued at ₹ 90,000, and the same was to be treated without opening a goodwill account.
- Revaluation of assets and reassessment of liabilities resulted in a gain of ₹ 25,000.
- Amount due to Anuj was transferred to his loan account, to be paid in two equal yearly instalments plus interest @ 12% p.a. on the unpaid balance starting from 31st March, 2024.
Prepare Partners’ Capital Accounts and Anuj’s Loan Account till it is fully discharged.
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Solution
| Dr. | Partners’ Capital Accounts | Cr. | |||||
| Particulars | Anuj | Divij | Shilpa | Particulars | Anuj | Divij | Shilpa |
| To Anuj’s Capital (Goodwill) | 30,000 | 60,000 | By Balance b/d | 3,00,000 | 4,00,000 | 5,00,000 | |
| To Anuj’s Loan A/c | 4,00,000 | By Revaluation. Gain | 10,000 | 5,000 | 10,000 | ||
| To Balance c/d | 3,75,000 | 4,50,000 | By Divij & Shilpa (Goodwill) |
90,000 | |||
| 4,00,000 | 4,05,000 | 5,10,000 | 4,00,000 | 4,05,000 | 5,10,000 | ||
| Dr. | Anuj’s Loan Account | Cr. | |||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
| 2024 | 2023 | ||||
| Mar 31 | To Bank | 2,48,000 | Mar 31 | By Anuj’s Capital A/c | 4,00,000 |
| Mar 31 | To Balance c/d | 2,00,000 | 2024 | ||
| Mar 31 | By Interest | 48,000 | |||
| 4,48,000 | 4,48,000 | ||||
| 2025 | 2024 | ||||
| Mar 31 | To Bank | 2,24,000 | Apr 1 | By Balance b/d | 2,00,000 |
| 2025 | |||||
| Mar 31 | By Interest | 24,000 | |||
| 2,24,000 | 2,24,000 | ||||
Working Note:
1. Gaining Ratio:
Old Ratio (Anuj : Divij : Shilpa) = 2 : 1 : 2
Since no new ratio is given, the remaining partners (Divij and Shilpa) gain in their old relative ratio, which is 1 : 2.
2. Adjustment for Goodwill:
Anuj’s share of goodwill = ₹ 90,000
This is debited to Divij and Shilpa in their gaining ratio 1 : 2
Divij = `90,000 xx 1/3`
= 30,000
Shilpa = `90,000 xx 2/3`
= 60,000
3. Revaluation Gain Distribution:
Total Gain = ₹ 25,000 (shared in 2 : 1 : 2).
Anuj’s Loan Instalments:
Total amount due (Loan) = ₹ 4,00,000.
Two equal yearly instalments = `(4,00,000)/2`
= 2,00,000 per year
Interest is calculated at 12% p.a. on the outstanding balance.
