L, M and N Were Partners in a Firm Sharing Profit in the Ratio of 3:2:1. Their Balance Sheet on 31.3.2015 Was as Follows - Accountancy

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L, M and N were partners in a firm sharing profit in the ratio of 3:2:1. Their Balance Sheet on 31.3.2015 was as follows :

                                          Balance Sheet of L,M and N as on 31-3-2015

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

General Reserve

Capitals

     L                               1,20,000

     M                                 80,000

     N                                  40,000 

 

1,68,000

42,000

 

 

 

2,40,000

 

Bank

Debtors

Stock

Investments

Furniture

Machinery

 

34,000

46,000

2,20,000

60,000

20,000

70,000

 

  4,50,000   4,50,000

On the above date O was admitted as a new partner and it was decided that:

(i) The new profit sharing ratio between L, M, N and 0 will be 2: 2: 1: 1.

(ii) Goodwill of the firm was valued at Rs.1,80,000 and O brought his share of goodwill premium in cash.

(iii) The market value of investments was Rs.36,000.

(iv) Machinery will be reduced to Rs.58,000.

(v) A creditor of Rs.6,000 was not likely to claim the amount and hence to be written-off.

(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.

Prepare Revaluation Account. Partner's Capital Accounts and the Balance Sheet of the New Firm

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Solution

                                                          Revaluation Account

Dr.                                                                                                                                    Cr.

Particulars Amount(Rs.) Particulars Amount(Rs.)

To Investment

To Machinery

 

 

 

 

 

24,000

12,000

 

 

 

 

 

By Creditors

 

By Loss on Revaluation

        L’s Capital A/c         15,000

        M’s Capital A/c        10,000

        N’s Capital A/c          5,000 

 

6,000

 

 

 

 

30,000

 

  36,000   36,000

 

                                                                                        Partner’s Capital Account

Dr.                                                                                                                                                                                                                 Cr.

Particulars L(Rs.) M(Rs.) N(Rs.) O(Rs.) Particulars L(Rs.) M(Rs.) N(Rs.) O(Rs.)

To Reval. A/c

 

To Balance c/d

 

15,000

 

1,56,000

 

10,000

 

84,000

 

5,000

 

42,000

 

 

 

56,400

 

By Balance c/d

General Reserve

Prem For G/w

Cash A/c

1,20,000

21,000

30,000

 

80,000

14,000

 

 

40,000

7,000

 

 

 

 

 

56,400

  1,71,000 94,000 47,000 56,400   1,71,000 94,000 47,000 56,400

 

                                                             Balance Sheet

                                                        as on March 31,2015

Liabilities Amount (Rs.) Assets Amount (Rs.)

Creditors

Capitals :

   L                                1,56,000

   M                                  84,000

   N                                  42,000

   O                                  56,400  

 

1,62,000

 

 

 

 

3,38,400

 

Bank (34,000 + 56,400 + 30,000)

Debtors

Stock

Investments

Furniture

Machinery

 

1,20,400

46,000

2,20,000

36,000

20,000

58,000

 

  5,00400   5,00400

 

Working Notes :

WN1 : Calculation of Sacrificing Ratio

Sacrificing Ratio = Old Ratio - New Ratio

L's = (3/6) - (2/6) = 1/6

M's = (2/6) - (2/6) = Nil

N's = (1/6) - (1/6) = Nil

WN 2: Adjustment of Goodwill

O's Share of Goodwill = 1,80,000 x (1/6) = 30,000

30,000 will be credited to L's Capital A/c, as he is the only sacrificing partner

WN 3: Calculation of O’s Proportionate Capital

Adjusted Old Capital of L = 1, 20,000 + 21,000 + 30,000 – 15,000 = `1, 56,000

 

 

Adjusted Old Capital of M = 80,000 + 14,000 – 10,000 = `

 

Adjusted Old Capital of M = 80,000 + 14,000 – 10,000 = `

Adjusted Old Capital of M = 80,000 + 14,000 – 10,000 = `84,000

 

Adjusted Old Capital of N = 40,000 + 7,000 – 5,000 = `

Adjusted Old Capital of N = 40,000 + 7,000 – 5,000 = `42,000

 

Total Adjusted Capital = 1, 56,000 + 84,000 + 42,000 = `

 

Total Adjusted Capital = 1, 56,000 + 84,000 + 42,000 = `

Total Adjusted Capital = 1, 56,000 + 84,000 + 42,000 = `2, 82,000

O’s Proportionate Capital = Total Adjusted Capital x O’s Profit Share x Reciprocal of Combined New Share of Old Partners

                                   `= 282000xx1/6xx6/5=56400`

 

Concept: Preparation of Revaluation Account and Balance Sheet
  Is there an error in this question or solution?
2015-2016 (March) All India Set 1

RELATED QUESTIONS

Ajay, Aman and Anand were partners in a firm sharing profits in the ratio of 5:1:4. Their Balance Sheet as on 31-3-2015 was as follows :

                                              Balance Sheet of Ajay,Aman and Anand as on 31-3-2015

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Bills Payable

General Reserve

Capitals

      Ajay                                      5,00,000

      Aman                                     1,00,000

      Anand                                    1,60,000

1,47,000

33,000

2,10,000

 

 

 

7,60,000

Land

Building

Plant

Stock

Debtors

Bank

 

5,40,000

2,70,000

1,90,000

75,000

60,000

15,000

 

  11,50,000   11,50,000

From 1-4-2015 Ajay. Aman and Anand decided to share future profits equally. For this it was agreed that:

(i) Goodwill of the firm be valued at Rs1, 80,000.

(ii) Land be revalued at Rs.6,00,000 and building be depreciated by 10%.

(iii) Creditors of Rs.15,000 were not likely to be claimed and hence be written-off.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.


P, Q and R were partners in a firm sharing profits in the ratio of 3:2:1. On 31-3-2015 their Balance Sheet was as follows :

                                     Balance Sheet of P,Q and R as on 31-3-2015

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

General Reserve

Capitals

     P                                      1,80,000

     Q                                      1,20,000

     R                                        60,000

 

2,52,000

63,000

 

 

 

3,60,000

 

Bank

Debtors

Stock

Investments

Furniture

Machinery

 

51,000

69,000

3,30,000

90,000

30,000

1,05,000

 

  6,75,000   6,75,000

On the above date S was admitted as a new partner and it was decided that:

(i) The new profit sharing ratio between P, Q, R and S will be 2:2:1:1.

(ii) Goodwill of the firm was valued at Rs.2, 70,000 and S will bring his share of goodwill premium in cash.

(iii) The market value of investments was Rs.64,000.

(iv) Machinery will be reduced to Rs.87,000.

(v) A creditor of Rs.9,000 was not likely to claim the amount and hence to be written-off.

(vi) S will bring proportionate capital so as to give him 1/6th share in the profits of the firm.

Prepare Revaluation Account. Partners' Capital Accounts and the Balance Sheet of P, Q, R and S.


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


A, B and C were partners in a firm sharing profit in the ratio of 3:2:1. On 31-3-2015 their Balance sheet was as follows :

                           Balance Sheet of A,B and C as on 31-3-2015

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

General Reserve

 

Capitals

    A                       60,000

    B                       40,000

    C                       20,000

84,000

21,000

 

 

 

 

1,20,000

Bank

Debtors

Stock

Investments

Furniture & Fittings

Machinery

 

17,000

23,000

1,10,000

30,000

10,000

35,000

 

  2,25,000   2,25,000

On the above date D was admitted as new partner and it was decided that

(i) The new profit sharing ratio between A, B, C and D will be 2:1:1:1.

(ii) Goodwill of the firm was valued at Rs.90,000 and D brought his share of goodwill premium in cash.

(iii) The Market value of investments was Rs.24,000

(iv) Machinery will be reduced to Rs.29,000

(v) A Creditor of Rs.3,000was not likely to claim the amount and hence to be written off.

(vi) D will bring proportionate capital so as to give him 1/6th share in the profits of the firm.

Prepare Revaluations Account, Partner’s Capital Accounts and Balance Sheet of the reconstitute firm


J, H and K were partners in a firm sharing profits in the ratio of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:

                                   Balance Sheet of J,H and K as on 31-3-2015

LIabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       J                            1,00,000

       H                             80,000

       K                             40,000 

 

42,000

20,000

80,000

 

 

 

2,20,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         80,000

      Less:                         6,000  

Cash

2,24,000

40,000

38,000

24,000

30,000

 

74,000

32,000

  3,62,000   3,62,000

On the above data H retires and J and K agreed to continue the business on the following terms:

(i) Goodwill of the firm was valued at Rs.1,02,000.

(ii) There was a claim of Rs.8,000 for workmen's compensation.

(iii) Provision for bad debts was to be reduced by Rs.2,000.

(iv) H will be paid Rs.14,000 in cash and the balance will be transferred in his loan account which will be paid in four equal yearly installments together with interest @ 10% p.a.

(v) The new profit sharing ratio between J and K will be 3:2 and their capitals will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.


Nardeep, Hardeep and Gagandeep were partners in a firm sharing profits in 2:1:3 ratio. Their Balance Sheet as on 31.3.2015 was as follows

Balance Sheet of Nardeep,Hardeep and Gagandeep as on 31-3-2015

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

Bills Payable

General Reserve

Capitals

 Nardeep            2,00,000

 Hardeep            1,00,000

 Gagandeep          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

 

From 1-4-2015 Nardeep, Hardeep and Gagandeep decided to share the future profits equally. For this purpose it was decided that

(a) Goodwill of the firm be valued at Rs 3, 00,000.

(b) Land be revalued at Rs 1, 60,000 and building be depreciated by 6%.

(c) Creditors of Rs 12,000 were not likely to be claimed and hence be written off.

Prepare, Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.


X, Y and Z were partners in a firm sharing profit in the ratio of 1:2:3. On 31-3-2015 their Balance sheet was as follows :

                                                                             Balance Sheet of X,Y and Z as on 31-3-2015

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

Bills Payable

General Reserve

Capitals

      X                                    50,000

      Y                                    25,000

      Z                                   12,500  

                25,000

                10,000

                10,000

 

 

 

               87,500

Land

Building

Plant

Stock

Debtors

Bank

 

                        25,000

                        25,000

                        50,000

                        20,000

                        15,000

                          2,500

 

             1,37,500                          1,37,500

X, Y and Z decided to Share the profits equally with effect from 1-4-2015. For this It was agreed that

(i) Goodwill of the firm will be valued at 75,000

(ii) Land will be revalued at 40,000 and building be depreciated by 6%.

(iii) Creditors of 3,000 were not likely to be claimed and hence should be written off

Prepare Revaluations Account, Partner’s Capital Accounts and Balance Sheet of the reconstitute firm.


A, B and C were partners in a firm sharing profit in the ratio of 3:2:1. On 31-3-2015 their Balance sheet was as follows :

                                             Balance Sheet of A,B and C as on 31-3-2015

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

Bills Payable

 

Capitals

    A                                    1,00,000

    B                                       50,000

    C                                       25,000      

General Reserve

50,000

20,000

 

 

 

 

1,75,000

30,000

Land

Building

Plant

Stock

Debtors

Bank

 

 

50,000

50,000

1,00,000

40,000

30,000

5,000

 

 

   2,75,000    2,75,000

On the above date D was admitted as new partner and it was decided that: 

(i) Goodwill of the firm will be valued at 1,50,000

(ii) Land will be revalued at 80,000 and building be depreciated by 60%.

(iii) Creditors of 6,000 were not likely to be claimed and hence should be written off

Prepare Revaluations Account, Partner’s Capital Accounts and Balance Sheet of the reconstitute firm.


Xavier, Yusuf and Zaman were partners in a firm sharing profits in the ratio of 4:3: 2. On 1.4.2014 their Balance sheet was as follows:

Liabilities

Amount

Rs

Assets

Amount

Rs

Sundry Creditors

Capital Accounts

    Xavier     1,20,000

    Yusuf        90,000

    Zaman      60,000

 

41,400

 

 

 

2,70,000

 

Cash at Bank

Sundry Debtors                   30,450

    Less: Prov. For Bad debts   1,050

Stock

Plant and Machinery

Land and Building

33,000

 

29,400

48,000

51,000

1,50,000

  3,11,400   3,11,400

Yusuf had been suffering from ill health and thus gave notice of retirement from the firm. An agreement was, therefore, entered into as on 1.4.2014, the terms of which were as follows:

1) That land and building be appreciated by 10%

2) The provision for bad debts is no longer necessary

3) That stock be appreciated by 20%

4) That goodwill of the firm be fixed at Rs 54,000. Yusuf share of the same be adjusted into Xavier's and Zamna's Capital Accounts, who are going to share future profits in the ratio of 2:1

5) The entire capital of the newly constituted firm be readjusted by bringing in or paying necessary cash so that the future capitals of Xavier and Zaman will be in their profit sharing ratio.

Prepare Revaluation Account and Partner's Capital Account


L, M and N were partners in firm sharing profits in the ratio of 2:1:1. On 15' April 2013 their Balance Sheet as follows:

Balance Sheet of L, M and N as on 1st April 2013
Liabilities Rs Assets Rs

Capital:

    L             6,00,000

    M             4,80,000

    N             4,80,000

General Reserve

Workman’s Compensation Fund

Creditors

 

 

 

 

15,60,000

4,40,000

3,60,000

2,40,000

 

Land

Building

Furniture

Debtors             4,00,000

Less: Provision      20,000

Stock

Cash

 

8,00,000

6,00,000

2,40,000

 

3,80,000

4,40,000

1,40,000

 

  26,00,000   26,00,000

On the above date, N retired

The following were agreed:

i. Goodwill of the firm was valued at Rs 6,00,000.
ii. The land was to be appreciated by 40% and Building was to be depreciated by Rs 1,00,000. Furniture was to be depreciated by Rs 30,000.
iii. The liabilities for Workmen's Compensation Fund was determined at Rs 1,60,000.
iv. The amount payable to N was transferred to his loan account.
v. Capitals of L and M were to be adjusted in their new profit sharing ratio and for this purpose current accounts of the partners will be opened.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.


X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    

(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below : 

Dr.

                      Z’s Capital Account

Cr.

 Date

    Particulars

Amount

(Rs)

Date

   Particulars

 Amount

(Rs)

2016

 

 

2016

 

 

Sep. 30

……………

30,000

April 1

……………

80,000

Sep. 30

……………

2,000

Sep. 30

……………

4,800

Sep. 30

……………

……...

Sep. 30

……………

20,000

 

 

 

Sep. 30

……………

……...

 

 

 

Sep. 30

……………

……...

 

 

1,64,800

 

 

1,64,800

 

 

 

 

 

 

 

You are required to complete Z's Capital Account. 


 


A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31-3-2015 their Balance Sheet was as follows:

               Balance Sheet of A, B and C as on 31-3-2015

           Liabilities

Amount

(Rs)

          Assets

Amount

(Rs)

Creditors

63,000

Land and Building

1,86,000

Investment

 

Motor Vans

60,000

Fluctuation Fund

30,000

Investments

57,000

P & L Account

1,20,000

Machinery

36,000

Capitals:

 

Stock

45,000

  A

1,50,000

 

Debtors

1,20,000

 

  B

1,20,000

 

  Less: Provision

9,000

1,11,000

  C

60,000

3,30,000

Cash

48,000

 

5,43,000

 

5,43,000

 

 

 

On the above date B retired and A and C agreed to continue the business on the following terms :


(1) Goodwill of the firm was valued at Rs 1,53,000.


(2) Provision for bad debts was to be reduced by Rs 3,000.


(3) There was a claim of Rs 12,000 for workmen compensation.


(4) B will be paid Rs 24,600 in cash and the balance will be transferred to his loan account which will be paid in four equal yearly instalments together with interest @ 10% p.a.


(5) The new profit sharing ratio between A and C will be 3:2 and their capital will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.


Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of A and C.


Verma and Sharma were partners sharing profits in the ratio of 3 : 1. On 31-3-2011 their Balance

Sheet was as follows:

                   Balance Sheet of Verma and Sharma

                                 as on 31-3-2011

      Liabilities

Amount

Rs

     Assets

Amount

Rs

Capitals:

 

Land and Building

70,000

Verma

1,20,000

 

Machinery

60,000

Sharma

80,000

2,00,000

Debtors

80,000

Creditors

70,000

Bank

60,000

 

 

 

 

 

 

 

 

 

2,70,000

 

2,70,000

 

 

 

The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as follows:

(i) Creditors of Rs 50,000 took over Land and Building in full settlement of their claim.

(ii) Remaining Creditors were paid in cash.

(iii) Machinery was sold at a depreciation of 30%.

(iv) Debtors were collected at a cost of Rs 500.

(v) Expenses of realisation were Rs 1,700.

Pass necessary Journal Entries for dissolution of the firm. 

 


A, B and C were partners sharing profits in the ratio of 3 : 1 : 1. Their Balance-Sheet as on March 31st 2009, the date on which they dissolve their firm, was as follows:  

     Liabilities

Amount

Rs

         Assets

Amount

Rs

Capitals:

 

Sundry Assets

17,000

A

27,500

 

Stock

7,800

B

10,000

 

Debtors

24,200

 

C

7,000

44,500

Less: Provision for doubtful debts

1,200

23,000

Loan

1,500

Bills Receivable

1,000

Creditors

6,000

Cash

3,200

 

52,000

 

52,000

 

 

 

It was agreed that:

(a) A to take over Bills Receivable at Rs 800, debtors amounting to Rs 20,000 at 17,200 and the creditors of Rs 6,000 were to be paid by him at this figure.

(b) B is to take over all stock for Rs 7,000 and some sundry assets at Rs 7,200 (being 10% less than the book value)

(c) C to take over remaining sundry assets at 90% of the book value and assume the responsibility of discharge of loan together with accrued interest of Rs 300.

(d) The expenses of realization were Rs 270

The remaining debtors were sold to a debt collecting agency at 50% of the book value. Prepare Realisation A/c, Partners Capital A/c and Cash A/c

 


Answer briefly of the following question:

Give any two differences between Revaluation Account and Realisation Account.


Annie and Bonnie are partners in a firm, sharing profits and losses equally. Their Balance Sheet as at 31st March,
2017, was as follows:

                        Balance Sheet of Annie and Bonnie
                               As at 31st March, 2017

Liabilities Amount Rs. Assets AmountRs.
Sundry Creditors           21,000 Cash at Bank 20,000
General Reserve           15,000

Sundry Debtors                   22,000

Less Provision for Doubtful Debts                    (1,000)

 

 

 

21,000

Capital A/c

Annie 45,000

Bonnie40,000

 

 

          85,000

Stock 10,000
    Plant & Machinery 60,000
    Goodwill 10,000
  1,21,000   1,21,000

Carl was to be taken as a partner for 1/4 share in the profits of the firm, with effect from 1st April, 2017, on the
following terms:
(a) Bad debts amounting to Rs. 1,500 to be written off.
(b) Stock to be taken over by Annie at Rs.12,000.

(c) Plant and Machinery to be valued at Rs. 50,000.
(d) Goodwill of the firm to be valued at Rs. 20,000.
(e) Carl to bring in Rs. 50,000 as his capital. He was unable to bring his share of goodwill in cash.
(f) General Reserve not to be distributed. For this, it was decided that Carl would compensate the old partners
through his current account.
You are required to:
(i) Pass journal entries on the date of Carl's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm


Susan, Geeta and Rashi are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2017, is as under:

Balance Sheet of Susan, Geeta and Rashi As at 31st March, 2017

Liabilities Amount Assets Amount
Sundry Creditors          50,000  Cash at Bank 70,000
Workmen Compensation Reserve          25,000 

Sundry Debtor 65,000

Less Provision for Doubtful Debts (5,000

 

 

                     60,000 

Employees Provident Fund           5,000  Goodwill                      50,000 
Bank Loan         55,000  Furniture                   1,00,000 

Capital A/C

Susan                            2,20,000 

Geeta                            1,70,000 

Rashi                             1,35,000 

 

 

 

5,25,000 

Building                   3,80,000 
  6,60,000    6,60,000 

The partners decided to dissolve their partnership on 31st March, 2017. The following transactions took place at the time of dissolution :

(a) Realization expenses of 2,000 were paid by Susan on behalf of the firm.

(b) Geeta took over the goodwill for her own business at  40,000.

(c) Building was taken over by Rashi at 3,00,000.

(d) Only 80% of the debtors paid their dues.

(e) Furniture was sold for  97,000.

(f) Bank Loan was settled along with interest of 5,000. You are required to prepare the Realization Account.


Achla and Bobby were partners in a firm sharing profits and losses in the ratio of 3: 1. On 31st March 2019, their balance sheet was as follows:

Balance Sheet of Achla and Bobby as on 31st March 2019

Liabilities 

Amount(₹)

Assets

Amount(₹)

Creditors

1,10,000

Cash at bank

60,000

General Reserve

40,000

Debtors

40,000

Workmen's compensation reserve

50,000

Stock

45,000

Capitals :

 

Furniture

1,55,000

Achla - 4,00,000

 

Land & Building  

5,00,000

Bobby - 2,00,000

6,00,000

 

 

 

8,00,000

 

8,00,000

On 1st April 2019, they admitted Vihaan as a new partner for 1/5th share in the profits of the firm on the following terms:
(a) Vihaan brought ₹ 1,00,000 as his capital and the capitals of Achla and Bobby were to be adjusted on the basis of Vihaan's capital; any surplus or deficiency was to be adjusted by opening current accounts.
(b) Goodwill of the firm was valued at ₹ 4,00,000. Vihaan brought the necessary amount in cash for his share of goodwill premium, half of which was withdrawn by the old partners.
(c) Liability on account of workmen's compensation amounted to ₹ 80,000.
(d) Achla took overstock at ₹ 35,000.
(e) Land and building was to be appreciated by 20%.

Prepare Revaluation Account, Partner's Capital Accounts, and the Balance Sheet of the reconstituted firm on Vihaan's admission.


Gita, Radha, and Garv were partners in firm sharing profits and losses in the ratio of 3: 5: 2. On 31st March 2019, their balance sheet was as follows: ​

Balance Sheet of Gita, Radha & Garv as on 31st March 2019 

Liabilities 

Amount (₹)

Assets Amount (₹)
Sundry Creditors

60,000

Cash 50,000
General Reserve

40,000

Stock 80,000
Capitals :

 

Debtors 40,000
Gita  -   3,00,000

 

Investments   30,000
Radha - 2,00,000

 

Buildings 5,00,000
Garv -  1,00,000

6,00,000

   
  7,00,000   7,00,000

Radha retired on the above date and it was agreed that:
(a) Goodwill of the firm be valued at ₹ 3,00,000 and Radha's share be adjusted through the capital accounts of Gita and Gary.
(b) Stock was to be appreciated by 20%.
(c) Buildings were found undervalued by ₹ 1,00,000.
(d) Investments were sold for ₹ 34,000.
(e) Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the partners; the necessary adjustments for this purpose were to be made by opening current accounts of the partners.

Prepare Revaluation Account, Partner's Capital Accounts, and the Balance Sheet of the reconstituted firm on Radha's retirement.


Akul, Bakul, and Chandan were partners in a firm sharing profits in the ratio of 2 : 2: 1. On 31st March 2018 their Balance Sheet was as follows:

Balance Sheet of Akul, Bakul and Chandan as on 31.3.2018 

Liabilities

Amount (₹)

Assets Amount (₹)
Sundry Creditors 45,000 Cash at Bank 42,000
Employees Provident Fund  13,000 Debtors           60,000  
General Reserve 20,000 Less: Provision for doubtful debts   2000 58,000
Capitals:      
Akul              1,60,000   Stock 80,000
Bakul            1,20,000   Furniture 90,000
Chandan         92,000 3,72,000 Plant and Machinery 1,80,000
  4,50,000   4,50,000

Bakul retired on the above date and it was agreed that:
(i) Plant and Machinery were undervalued by 10%.
(ii) Provision for doubtful debts was to be increased to 15% on debtors.
(iii) Furniture was to be decreased to ₹ 87,000.
(iv) Goodwill of the firm was valued at ₹ 3,00,000 and Bakul's share was to be adjusted through the capital accounts of Akul and Chandan.
(v) Capital of the new firm was to be in the new profit sharing ratio of the continuing partners.
Prepare Revaluation account, Partners' Capital accounts, and the Balance Sheet of the reconstituted firm.


Which of the following transactions is debited to Revaluation Account?


On the date of admission of Ajay as a partner, the Balance Sheet of the firm of Nita and Rita showed a balance of ₹ 80,000 in the Workmen Compensation Reserve. Choose the correct option to record the effect of a workmen compensation claim of ₹ 90,000 on the accounts of the partnership firm.


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