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Solution - Preparation of Revaluation Account and Balance Sheet

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Kushal Kumar and Kavita were partners in a firm sharing profit in the ratio 3:1:1. On 1st April ,2012 their Balance Sheet was as follows:

Balance Sheet of Kushal, Kumar and Kavita as on 1st April, 2012

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)

Creditors

Bill payable

General Reserve

Capital:

       Kushi                          3,00,000

       Kumar                        2,80,000

       Kavita                         3,00,000  

1,20,000

1,80,000

1,20,000

 

 

 

8,80,000

Cash

Debtors                              2,00,000

  Less: Provision                     10,000  

Stock

Furniture

Building

Land

70,000

 

1,90,000

2,20,000

1,20,000

3,00,000

4,00,000

 13,00,000 13,00,000

On the above date Kavita retired and the following was agreed:

i. Goodwill of the firm was valued at Rs.40,000.

ii. Land was to be appreciated by 30% and building was to be depreciated by Rs.1,00,000.

iii. Value of furniture was to be reduced by Rs.20,000.

iv. Bad debts reserve is to be increased to Rs.15,000.

v. 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.

vi. Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.

Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita's retirement.

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Mohan and Mahesh were partners in a firm sharing profit in the ratio 3:2. On 1st April, 2012 they admitted Nusrat as a partners in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under:

Balance Sheet of Mohan and Mahesh as on 1st April, 2012

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)

Creditors

Workman’s Compensation Fund

General Reserve

Capital:

       Mohan                     1,00,000

       Mahesh                       80,000

 

2,10,000

2,50,000

1,60,000

 

 

1,80,000

 

Cash in hand

Debtors

Stock

Machinery

Building

 

 

1,40,000

1,60,000

1,20,000

1,00,000

2,80,000

 

 

 8,00,000 8,00,000

It was agreed that:

i. The value of Building and Stock be appreciated to Rs.3,80,000 and Rs.1,60,000 respectively.

ii. The liabilities of workmen's compensation fund was determined at Rs.2,30,000.

iii. Nusrat brought in her share of goodwill Rs.1,00,000 in cash.

iv. Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustments are carried out.

v. The future profit sharing ratio will be Mohan 2/5, Mahesh 2/5, Nusrat 1/5.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. Also show clearly the calculation of Capital brough by Nusrat.

view solution

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.

view solution

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

LiabilitiesAmount(Rs)AssetsAmount(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.

view solution

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.

view solution

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

LiabilitiesAmount(Rs.)AssetsAmount(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.

view solution
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