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Chander and Damini Were Partners in a Firm Sharing Profits and Losses Equally. on 31st March 2017 Their Balance Sheet Was as Follows: Prepare Revaluation Account and Partners Capital Accounts. - CBSE (Arts) Class 12 - Accountancy

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1) Elina will bring Rs 3,00,000 as her capital and Rs 50,000 as her share of goodwill premium, half of which will be withdrawn by Chander and Damini.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

Solution

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
           

 

  Is there an error in this question or solution?
Solution Chander and Damini Were Partners in a Firm Sharing Profits and Losses Equally. on 31st March 2017 Their Balance Sheet Was as Follows: Prepare Revaluation Account and Partners Capital Accounts. Concept: Preparation of Revaluation Account and Balance Sheet.
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