# Solution - Preparation of Revaluation Account and Balance Sheet

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#### Question

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

 Liabilities Amount(Rs.) Assets Amount(Rs.) CreditorsWorkman’s Compensation FundGeneral ReserveCapital:       Mohan                     1,00,000       Mahesh                       80,000 2,10,0002,50,0001,60,000  1,80,000 Cash in handDebtorsStockMachineryBuilding 1,40,0001,60,0001,20,0001,00,0002,80,000 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.

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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

 Liabilities Amount (Rs.) Assets Amount (Rs.) CreditorsBill payableGeneral ReserveCapital:       Kushi                          3,00,000       Kumar                        2,80,000       Kavita                         3,00,000 1,20,0001,80,0001,20,000   8,80,000 CashDebtors                              2,00,000  Less: Provision                     10,000  StockFurnitureBuildingLand 70,000 1,90,0002,20,0001,20,0003,00,0004,00,000 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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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 AmountRs Assets AmountRs CreditorsBills Payable Capitals    A                                    1,00,000    B                                       50,000    C                                       25,000      General Reserve 50,00020,000    1,75,00030,000 LandBuildingPlantStockDebtorsBank 50,00050,0001,00,00040,00030,0005,000 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.

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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.) CreditorsBills PayableGeneral ReserveCapitals      Ajay                                      5,00,000      Aman                                     1,00,000      Anand                                    1,60,000 1,47,00033,0002,10,000   7,60,000 LandBuildingPlantStockDebtorsBank 5,40,0002,70,0001,90,00075,00060,00015,000 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.

view solution

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 AmountRs Assets AmountRs CreditorsBills PayableGeneral ReserveCapitals      X                                    50,000      Y                                    25,000      Z                                   12,500 25,000                10,000                10,000                  87,500 LandBuildingPlantStockDebtorsBank 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.

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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.) CreditorsGeneral ReserveCapitals     P                                      1,80,000     Q                                      1,20,000     R                                        60,000 2,52,00063,000   3,60,000 BankDebtorsStockInvestmentsFurnitureMachinery 51,00069,0003,30,00090,00030,0001,05,000 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 for concept: Preparation of Revaluation Account and Balance Sheet. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)
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