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Question
Balance Sheet of X, Y and Z who shared profits in the ratio of 5 : 3 : 2, as on 31st March, 2019 was as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Sundry Creditors | 39,750 | Bank (Minimum Balance) | 15,000 | |
| Employees' Provident Fund | 5,250 | Debtors | 97,500 | |
| Workmen Compensation Reserve | 22,500 | Stock | 82,500 | |
| Capital A/cs: | Fixed Assets | 1,87,500 | ||
| X | 1,65,000 | |||
| Y | 84,000 | |||
| Z | 66,000 | 3,15,000 | ||
| 3,82,500 | 3,82,500 | |||
Y retired on 1st April, 2019 and it was agreed that:
(i) Goodwill of the firm is valued at ₹ 1,12,500 and Y's share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3 : 2.
(ii) Fixed Assets be appreciated by 20%.
(iii) Stock be reduced to ₹ 75,000.
(iv) Y be paid amount brought in by X and Z so as to make their capitals proportionate to their new profit-sharing ratio.
Prepare Revaluation Account, Capital Accounts of all partners and the Balance Sheet of the New Firm.
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Solution
Revaluation Account
| Dr. |
Cr. |
|||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|||
| Stock |
7,500 |
Fixed Assets |
37,500 |
|||
| Revaluation Profit |
|
|||||
| X’s Capital A/c |
15,000 |
|
||||
| Y’s Capital A/c |
9,000 |
|
||||
| Z’s Capital A/c |
6,000 |
30,000 |
||||
|
37,500 |
37,500 |
|||||
Partners’ Capital Accounts
| Dr. | Cr. | |||||||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
| Y’s Capital A/c |
11,250 |
22,500 |
Balance b/d |
1,65,000 |
84,000 |
66,000 |
||
| Bank |
|
1,33,500 |
General Reserve |
11,250 |
6,750 |
4500 |
||
| Balance c/d |
2,20,500 |
|
1,47,000 |
Revaluation (Profit) |
15,000 |
9,000 |
6,000 |
|
|
|
|
|
X’s Capital A/c |
|
11,250 |
|
||
|
|
|
|
Z’s Capital A/c |
|
22,500 |
|
||
|
|
|
|
Bank A/c |
40,500 |
|
93,000 |
||
|
2,31,750 |
1,33,500 |
1,69,500 |
2,31,750 |
1,33,500 |
1,69,500 |
|||
Balance Sheet
as on March 31, 2019
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
|
| Sundry Creditors |
39,750 |
Bank |
15,000 |
|
| Employees Provident Fund |
5,250 |
Debtors |
97,500 |
|
| Capitals: | Stock |
75,000 |
||
| X |
2,20,500 |
Fixed Assets |
2,25,000 |
|
| Z |
1,47,000 |
72,000 |
||
|
4,12,500 |
4,12,500 |
|||
Working Notes:
New Capital = 1,80,000 + 54,000 + 1,33,500 = Rs 3,67,500
`"X's New Capital" = 3,67,500 xx 3/5 = 2,20,500`
`"Z's New Capital" = 3,67,500 xx 2/5 = 1,47,,500`
X brings in Rs 40,500 (2,20,500 – 1,80,000)
Z brings in Rs Rs 93,000 (1,47,500 – 54,000)
