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
Solution
Revaluation Account
Dr. Cr.
| Particulars | Amount(Rs.) | Particulars | Amount(Rs.) |
|
To Building A/c
To Revaluation (Profit) Ashok 33,000 Bhim 22,000 Chetan 11,000 |
6,000
66,000 |
By Land A/c By Creditors A/c
|
60,000 12,000
|
| 72,000 | 72,000 |
Partner’s Capital Account
Dr. Cr.
| Particulars | Ashok (Rs.) | Bhim (Rs.) | Chetan (Rs.) | Particulars | Ashok (Rs.) | Bhim (Rs.) | Chetan (Rs.) |
|
By Ashok’s Capital A/c
By Balance c/d
|
3,13,000
|
1,42,000
|
50,000
21,000
|
To Balance b/d To R/V Profit To General Reserve To Chetan’s Capital A/c
|
2,00,000 33,000 30,000 50,000
|
1,00,000 22,000 20,000
|
50,000 11,000 10,000
|
| 3,13,000 | 1,42,000 | 71,000 | 3,13,000 | 1,42,000 | 71,000 |
Balance Sheet
| Liabilities | Amount(Rs.) | Assets | Amount(Rs.) |
|
Capital Ashok 3,13,000 Bhim 1,42,000 Chetan 21,000 -------------- Creditors 1,00,000 Less : Written off 12,000 -------------- Bills Payable
|
66,000
88,000
40,000
|
Land 1,00,000 Add :Increase 60,000 Building 1,00,000 Less : Dep. 6,000
Plant Bank Stock Debtors |
1,60,000
94,000
2,00,000 10,000 80,000 60,000 |
| 6,04,000 | 6,04,000 |
Working Notes
Old Ratio New Ratio
3 : 2 : 1 1:1:1
S/R of Ashok=old Ration - New Ration=`3/6-1/3=1/6=>`Sacrificing
S/R of Bhim=old Ration - New Ration=`2/6-1/3=0/6=>`Sacrificing
S/R of Chetan=old Ration - New Ration=`1/6-1/3=1/6=>` Gaining
Ashok will be compensated by Chetan.
Chetan’s Capital A/c Dr 50,000
To Ashok’s Capital A/c 50,000
