Question

Chander and Damini were partners in a firm sharing profits and losses equally. On 31st March 2017 their Balance Sheet was as follows:

Balance Sheet of Chander and Damini as on 31.3.2017
Liabilities	Amount Rs	Assets	Amount Rs
Sundry Creditors Capitals:       Chander    2,50,000       Damini      2,16,000	1,04,000     4,66,000	Cash at Bank Bills Receivable Debtors Furniture Land and Building	30,000 45,000 75,000 1,10,000 3,10,000
	5,70,000		5,70,000

On 1.4.2017, they admitted Elina as a new partner for `1/3` rd share in the profits on the following conditions:

1) Elina will bring Rs 3,00,000 as her capital and Rs 50,000 as her share of goodwill premium, half of which will be withdrawn by Chander and Damini.

2) Debtors to the extent of Rs 5,000 were unrecorded.

3) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be created on bills receivables and debtors.

4) Value of land and building will be appreciated by 20%.

5) There is a claim against the firm for damages, a liability to the extern of Rs 8,000 will be created for the same.

Prepare Revaluation Account and Partners Capital Accounts.

Answer 1

In the books of Chander & Damini Revaluation Account

Dr

Cr

Particulars	Rs	Particulars	Rs
To Furniture To Provision for bad & Doubtful Debts To Claim for Damages To Profit transferred to:       Chander’s Capital   20,875       Damini’s Capital     20,875________	11,000 6,250   8,000     41,750	By Debtors By Land and Building	5,000 62,000
	67,000		67,000

 

In the books of Chander, Damini & Elina Partner’s Capital Account
Dr.							Cr.
Particulars	Chander	Damini	Elina	Particulars	Chander	Damini	Elina
To Bank A/c To Balance c/d	12,500 2,83,375	12,500 2,49,375	3,00,000	By Balance b/d By Bank A/c By Premium for Goodwill A/c By Revaluation A/c	2,50,000   25,000 20,875	2,16,000   25,000 20,875	3,00,000
	2,95,875	2,61,875	3,00,000		2,95,875	2,61,875	3,00,000