Maharashtra State BoardHSC Commerce 12th Board Exam
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Following is the Balance Sheet of Harish and Girish - Book Keeping and Accountancy

Ledger

Following is the balance sheet of Harish and Girish

               Balance Sheet as on 31st March, 2010

Liabilities Amount (Rs) Amount (Rs) Assets Amount (Rs) Amount (Rs)
Creditors   38000 Cash in Hand   37000
Bills Payable   46,000 Stock   21000
Profit and Loss A/c   16,000 Debtors 46000 40000
Capital A/c’s     (-)R.D.D 6000
Harish 100000 240000 Equipments   12000
Girish 140000 Furniture   25000
      Plant   85000
    Building   120000
  340000   340000

They admitted Shirish on 1st April 2010 on the following conditions:

1) For his 1/3rd share in the future profits Shirish brings Rs 2,00,000 as his Capital.

2) It is decided to raise goodwill by Rs 90,000 and write it off fully after Shirish’s admission.

3) Equipments and plant to be depreciated by 20% and10% respectively and Building to be appreciated by 15%.

4) Bills Payable were retired for Rs 35,000

5) All debtors are considered good.

6) Furniture of the book value Rs 12,000 was taken over by Harish at 40% of the book value.

Prepare, revaluation A/c, Partner’s Capital Account and Balance Sheet of the new firm.

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Solution

                     Profit and Loss Adjustment Account
Dr.                                                                                         Cr.

Particulars   Amount (Rs) Particulars Amount (Rs)
Plant  8500 Bills Payable 11000
Equipment 2400 Reserve for Doubtful Debts 6000
Furniture 7200 Building 18000
Profit transferred to :      
Harish's Capital 8450 16900  
Girish;s Capital 8450  
  35000   35000

 

                               Partners’ Capital Accounts
Dr.                                                                                       Cr.

Particulars Harish Girish Shirish Particulars Harish Girish Shirish
Plant 4800     Balance b/d 100000 140000  
Goodwill
(Written off)
30000 30000 30000 Profit and loss A/c 8000 8000  
Balance c/d  126650 171450 170000 Profit and Loss Adjustment (Profit)  8450 8450  
        Cash     200000
      Premium for Goodwill 45000 45000  
  161450 201450 200000   161450 201450 200000

Balance Sheet
as on April 01,2012 after shirish's admission

Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 38000 Stock 21000
Capital   Debtors 46000
Harish 126650 468100 Equipment 12000 9600
Girish 171450 Less : 20% Depreciation 2400
Shirish 170000 Plant 85000 76500
    Less : 10% Depreciation 8500
  Furniture 25000 13000
  Less : Taken by Harish 12000
  Building 138000
  Cash 202000
  506100   506100

Working Notes:

Calculation of Profit Sharing Ratio

Old Ratio = Harish : Girish = 1 : 1

Shirish's Share = `1/3`

Let the total share of firm = 1

Remaining share of firm = `1-1/3 = 2/3`

Harish's New Share = `2/3 xx 1/2 = 2/6`

Girish's New Share = `2/3 xx 1/2 = 2/6`

New Profit Sharing Ratio of Harish , Girish and Shirish
= `2/6 : 2/6 : 1/3 = (2:2:2)/6`

Sacrificing Ratio = Old Ratio - New Ratio

Harish's Sacrifice = `1/2 - 1/3 = 1/6`

Girish's Sacrifice = `1/2 - 1/3 = 1/6`

Sacrificing Ratio = 1 : 1

WN 1: Distribution of Profit and Loss A/c

Harish will give = `16000 xx 1/2 = "Rs" 8000`

Girish  will give = `16000 xx 1/2 = "Rs" 8000`

WN 2: Distribution of Shirish’s Share of Goodwill 

Harish will get = `90000 xx 1/2 = "Rs." 45000`

Girish will get = `90000 xx 1/2 = "Rs" 45000`

WN 3: Writing off Goodwill

Harish's Capital Account will be debited = `90000 xx 1/3 = "Rs" 30000`

Girish's Capital Account will be debited = `90000 xx 1/3 = "Rs" 30000`

Shirish’s Capital Account will be debited = `90000 xx 1/3 = "Rs" 30000`

WN 4 :

Loss of Furniture taken by Harish
= `"Rs" 12000 - "Rs" 4800 ("Rs" 12000 xx 40/100)`
= Rs 7200

WN 5 : Cash Account 
Dr.                             Cash Account                                   Cr.

Particulars Amount (Rs) Particulars Amount (Rs)
Balance b/d 37000 Goodwill Written off 90000
Premium for Goodwill 90000 Bills Payable 35000
Shirish’s Capital A/c 200000 Balance c/d 202000
  327000   327000
  Is there an error in this question or solution?
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 3 Reconstitution of Partnership (Admission of Partner)
Practical Problems | Q 4 | Page 110
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