Question

Murari and Vohra were partners in a firm with capitals of Rs 1,20,000 and Rs 1,60,000 respectively. On 1.4.2010 they admitted Yadav

as a partner for non-fourth share in profits on his payment of Rs 2,00,000 as his capital and Rs 90,000 for this one-fourth share of goodwill.

On that date the creditors of Murari and Vohra were Rs 60,000 and Bank Overdraft was Rs 15,000. Their assets apart from cash included Stock Rs 10,000; Debtors Rs 40,000; Plant and Machinery Rs 80,000; Land and Building Rs 2,00,000. It was agreed that stock should be depreciated by Rs 2,000; Plant and Machinery by 20%, Rs 5,000 should be written off as bad debts and Land and

Building should be appreciated by 25%.

Prepare Revaluation Account, Capital Accounts of Murari, Vohra and Yadav and the Balance Sheet of the new firm.

Answer 1

Revaluation Account
Dr.					Cr.
Particulars			Amount Rs	Particulars	Amount Rs
Stock			2,000	Land	50,000
Plant and Machinery			16,000
Bad Debts			5,000
Profit transferred to
Murari’s Cap.		13,500
Vohra’s Cap.		13,500	27,000
			50,000		50,000

Partners’ Capital Accounts
Dr.							Cr.
Particulars	Murari	Vohra	Yadav	Particulars	Murari	Vohra	Yadav
				By Balance b/d	1,20,000	1,60,000	–
				By Cash/Bank A/c	–	–	2,00,000
				By Premium for Goodwill	45,000	45,000	–
By Balance c/d	1,78,500	2,18,500	2,00,000	By Revaluation A/c (Profit)	13,500	13,500	–
	1,78,500	2,18,500	2,00,000		1,78,500	2,18,500	2,00,000

 

Balance Sheet                 as on April 01, 2010 after Yadav’s admission
Liabilities		Amount Rs	Assets		Amount Rs
Bank Overdraft		15,000	Cash in Hand		3,15,000
Creditors		60,000	Plant and Machinery	80,000
Capital A/c			Less: Revaluation	16,000	64,000
Murari	1,78,500		Land and Building	2,00,000
Vohra	2,18,500		Add: Revaluation	50,000	2,50,000
Yadav	2,00,000	5,97,000	Stock	10,000
			Less: Revaluation	2,000	8,000
			Debtors	40,000
			Less: Bad Debts	5,000	35,000
		6,72,000			6,72,000