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 - Accountancy

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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.

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Solution

                                                          Revaluation Account

Dr.                                                                                                                                          Cr.

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

To Investment

To Machinery

 

 

 

 

26,000

18,000

 

 

 

 

By Creditors

By Loss on Revaluation

       P’s Capital A/c      17,500

       Q’s Capital A/c      11,667

       R’s Capital A/c        5,833

 

9,000

 

 

 

35,000

 

  44,000   44,000

 

Partner’s Capital Account

Dr.                                                                                                                                                                                                             Cr.

Particulars P(Rs) Q(Rs) R(Rs) S(Rs) Particulars P(Rs) Q(Rs) R(Rs) S(Rs)

Reval. A/c

Balance c/d

 

 

 

17,500

2,39,000

 

 

 

11,667

1,29,333

 

 

 

5,833

64,667

 

 

 

 

86,600

 

 

 

Balance c/d

Gen. Reserve

Prem For G/w

Cash A/c

 

1,80,000

31,500

45,000

 

 

1,20,000

21,000

 

 

 

60,000

10,500

 

 

 

 

 

 

86,600

 

  2,56,500 1,41,000 70,500 86,600   2,56,500 1,41,000 70,500 86,600

 

                                                                       Balance Sheet

                                                                  as on March 31,2015

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

Creditors

Capitals :

    P                               2,39,000

    Q                               1,29,333

    R                                   64,667

    S                                   86,600

 

2,43,000

 

 

 

 

5,19,600

 

Bank (51,000 + 86,600 + 45,000)

Debtors

Stock

Investments

Furniture

Machinery

 

1,82,600

69,000

3,30,000

64,000

30,000

87,000

 

  7,62,600   7,62,600

 

Working Notes :

WN 1 : Calculation of Sacrificing Ratio

Sacrificing Ratio = Old Ratio - New Ratio

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

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

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

WN 2 : Adjustment of Goodwill

S's Share of Goodwill = 2,70,000 x (1/6) = 45,000

45,000 will be credited to P's Capital A/c, as he is the only sacrificing partner

WN 3 : Calculation of S’s Proportionate Capital

 Adjusted Old Capital of P = 1,80,000 + 31,500 + 45,000 – 17,500 = 2,39,000

Adjusted Old Capital of Q = 1,20,000+ 21,000 – 11,667 = 1,29,333

Adjusted Old Capital of R = 60,000 + 10,500 – 5,833 = 64,667

Total Adjusted Capital = 2,39,000 + 1,29,333 + 64,667 = 4,33,000

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

                                    = 4,33,000 x (1/6) x (6/5) = 86,600

Concept: Preparation of Revaluation Account and Balance Sheet
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2015-2016 (March) Foreign 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.


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

Investment Fluctuation Fund

P & L Account

Capitals

     A                                                       1,50,000

     B                                                       1,20,000

     C                                                          60,000

 

 

63,000

30,000

1,20,000

 

 

 

3,30,000

 

 

Land & Building

Motor Vans

Investments

Machinery

Stock

Debtors                                                     1,20,000

       Less : Provision                                       9,000

Cash

 

1,86,000

60,000

57,000

36,000

45,000

 

 

 

 

  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.


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


X, Y and Z were partners in a firm sharing profit’s in the firm of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:

                                   Balance sheet of X,Y and Z as on 31st march,2015

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

Creditors

Investment Fluctuation Fund

P & L Account

Capital:

       X                            50,000

       Y                             40,000

       Z                            20,000

 

21,000

10,000

40,000

 

 

 

1,10,000

 

Land and Building

Motor Vans

Investments

Machinery

Stock

Debtors                         40,000

      Less:                         3,000

Cash

62,000

20,000

19,000

12,000

15,000

 

37,000

16,000 

  1,81,000   1,81,000

On the above date Y retired and X and Z agreed to continue the business on the following terms:

(1) Goodwill of the firm was valued at Rs.51,000

(2) There was a claim of 4,000 for Workmen’s Compensation.

(3) Provision for bad debts was to be reduced by 1,000

(4) Y will be paid 8,200 in cash and the balance will be transferred in his loan account which will be paid in four equally yearly instalments together with interest @ 10% p.a.

(5) The new profit sharing ratio between X and Z 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 the Balance Sheet of reconstituted firm.


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


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.


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.


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.


Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2:2:3:3. On 1.4.2016 their Balance Sheet was as follows

Balance Sheet of Suresh, Ramesh, Mahesh and Ganesh
as on 1.4.2016
Liabilities Rs Assets Rs

Capitals :

Suresh               1,00,000

Ramesh              1,50,000

Mahesh               2,00,000

Ganesh               2,50,000

Sundry Creditors

Workmen Compensation Reserve

 

 

 

 

7,00,000

1,70,000

75,000

Fixed Assets

Current Assets

 

 

 

 

 

6,00,000

3,45,000

 

 

 

 

 

  9,45,000   9,45,000

From the above date, the partners decided to share the future profits equally. For this purpose, the goodwill of the firm was valued at Rs 90,000.

It was also agreed that:

1) Claim against Workmen Compensation Reserve will be estimated at Rs 1,00,000 and fixed assets will be depreciated by 10%.

2) The capitals of the partners will be adjusted according to the new profit sharing ratio. For this, necessary cash will be bought or paid by the partners as the case may be.

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


Amit, Balan and Chander were partners in a firm sharing profits in the proportion of `1/2, 1/3 and 1/6`respectively. Chander retired on 1-4-2014. The Balance Sheet of the firm on the date of Chander's retirement was as follows:

Balance Sheet of Amit, Balan and Chander as on 1-4-2014
Liabilities

Amount

Rs

Assets

Amount

Rs

Sundry Creditors

Provident Fund

General Reserve

Capitals

    Amit        40,000

    Balan       36,500

   Chander    2,000

12,600

3,000

9,000

 

 

 

96,500

Bank

Debtors            30,000

Less: Provision    1,000

Stock

Investments

Patents

Machinery

4,100

 

29,000

25,000

10,000

5,000

48,000

  1,21,100   1,21,100

It was agreed that:

(a) Goodwill will be valued at Rs 27,000.
(b) Depreciation of 10% was to be provided on machinery.
(c) Patents were to be reduced by 20%.
(d) Liability on account of Provident Fund was estimated at Rs 2,400.
(e) Chander took over investments for  Rs 15,800.
(f) Amit and Balan decided to adjust their capitals in a proportion of their profit sharing ratio by
opening current accounts.

Prepare Revaluation Account and Partners' Capital Accounts on Chander's retirement.


Om, Ram and Shanti were partners in a firm sharing profits in the ratio of 3:2:1. On 1st April 2014 their Balance Sheet was as follows:

Balance Sheet
Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Accounts

      Om         3,58,000

      Ram        3,00,000

     Shanti      2,62,000

General Reserve

Creditors

Bills payable

 

 

 

9,20,000

48,000

1,60,000

90,000

Land and Building

Plant and Machinery

Furniture

Bills Receivables

Sundry Debtors

Stock

Bank

3,64,000

2,95,000

2,33,000

38,000

90,000

1,11,000

87,000

  12,18,000   12,18,000

On the above date Hanuman was admitted on the following terms:

1) He will bring Rs 1,00,000 for his capital and will get the 1/10th share in the profits.

2) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was valued at Rs 3,00,000

3) A liability of Rs 18,000 will be created against bills receivables discount

4) The value of stock and furniture will be reduced by 20%.

]5) The value of land and building will be increased by 10%.

6) Capital accounts of the partners will be adjusted on the basis of Hanuman's capital in their profit sharing ratio by opening current accounts.

Prepare Revaluation Account and Partner's Capital Accounts.


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


O, R and S were partners in a firm sharing profit in the ratio of 3:2:1 On 1.4.2014 their Balance Sheet was as follows:

Liabilities

Amount

RS

Assets

Amount

Rs

Capital Accounts

       O      1,75,000

       R      1,50,000

       S      1,25,000

Current Accounts

      O    4,000

      S    6,000

General Reserve

Profit and Loss Accounts

Creditors

Bills Payable

 

 

 

4,50,000

 

 

10,000

15,000

7,000

80,000

45,000

R’s Current Accounts

Land and Building

Plant and Machinery

Furniture

Investment

Bills Receivables

Sundry Debtors

Stock

Bank

 

 

7,000

1,75,000

67,500

80,000

36,500

17,000

43,500

1,37,000

43,500

 

 

  6,07,000   6,07,000

On the above date, H was admitted on the following terms:
(i) H will bring Rs 50,000 as his capital and will get 116 th share in the profits.
(ii) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was
valued at Rs 90,000.
(iii) The new profits sharing ratio will be 2:2:1:1.
(iv) A liability of Rs 7,004 will be created against bills receivables discounted.
(v) The value of stock, furniture and investments is reduced by 20% whereas the value of land and building and plant and machinery will be appreciated by 20% and 10% respectively.
(vi) The Capital accounts of the partners will be adjusted on the basis of H's Capital through their
current accounts.
Prepare Revaluation Account and Partner's Current Accounts and Capital Accounts.


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.


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.


Khanna, Seth and Mehta were partners in a firm sharing profit in the ratio of 3 : 2 : 5. On

31.12.2010 the Balance Sheet of Khana, Seth and Mehta was as follows:  

      Liabilities

Amount

Rs

    Assets

Amount

Rs

Capitals:

 

Goodwill

3,00,000

Khanna:

3,00,000

 

Land and Building

5,00,000

Seth:

2,00,000

 

Machinery

1,70,000

Mehta:

5,00,000

10,00,000

Stock

30,000

General Reserve

1,00,0000

Debtors

1,20,000

Loan from Seth

50,000

Cash

45,000

Creditors

75,000

Profit and Loss Account

60,000

 

12,25,000

 

On 14th March 2011, Seth died.

The partnership deed provides that on the death of a partner the executor of the deceased partners

is entitled to:

(i) Balance in Capital Account;

(ii) Share in profits upto the date of death on the basis of last year’s profit;

(ii) His share in profit/loss in revaluation of assets and re-assessment of liabilities which were as follows:

(a) Land and Building was to be appreciated by Rs 1,20,000;

(b) Machinery was to be depreciated to Rs 1,35,000 and stock to Rs 25,000;

(c) A provision of `2 1/2%` for bad and doubtful debts was to created on debtors;

(iv) The net amount payable to Seth’s executors was transferred to his loan account which was to be paid later.

Prepare Revalution Account, Partners Capital Accounts, Seth’s Executors Account and the

Balance Sheet of Khanna and Mehta who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus of deficit to be transferred the current account of the partners. 


The Balance Sheet of Ram and Shyam, who were sharing profits in the ratio of 3 : 1 on 31st March, 2009 was as follows: 

       Liabilities

Amount

Rs

       Assets

Amount

Rs

Creditors

2,800

Cash at bank

2,000

Employees’ provident fund

1,200

Debtors

6,500

 

General Reserve

2,000

Less: Reserve for bad debts

(500)

6,000

Capitals

 

Stock

3,000

Ram

6,000

 

Investments

5,000

Shyam

4,000

10,000

 

 

 

16,000

 

16,000

 

 

 

 


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.


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.


Which of the following transactions is debited to Revaluation Account?


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