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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 - Preparation of Revaluation Account and Balance Sheet

ConceptPreparation of Revaluation Account and Balance Sheet

Question

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.

Solution

                                                         Revaluation Account

Dr.                                                                                                                                                     Cr

Particulars

Amount

Rs

Particulars

Amount

Rs

Building A/c

 

Revaluation Profit

     Nardeep         22,000

     Hardeep         11,000

     Gagandeep    33,000

              6,000

 

 

 

 

           66,000

Land A/c

 

Creditors A/c

 

 

 

               60,000

 

               12,000

 

 

 

             72,000                  72,000
   

 

                                                            Partner’s Capital Account

Dr.                                                                                                                                                                                                                                Cr.

Particulars

Nardeep

Rs

Hardeep

Rs

Gagandeep

Rs

Particulars

Nardeep

Rs

Hardeep

Rs

Gagandeep

Rs

Gagandeep’s Capital A/c

 

 

 

 

Balance c/d

 

 

 

 

 

 

    2,42,000

              50,000

 

 

 

 

             71,000

 

 

 

 

 

          1,63,000

Balance b/d

R/V Profit

General

Reserve

Hardeep’s

Capital A/c

            2,00,000

               22,000

 

               20,000

 

 

            1,00,000

               11,000

 

               10,000

 

 

            50,000

            33,000

 

            30,000

 

            50,000

 

     2,42,000

           1,21,000

         1,63,000

 

          2,42,000

            1,21,000

       1,63,000

           

 

                                                                                Balance Sheet

Liabilities

Amount

Rs

Assets

Rs

Amount

Rs

Capital

          Nardeep               2,42,000

          Hardeep                  71,000

         Gagandeep           1,63,000  

 

 

Creditors                        1,00,000

    Less : Written off          12,000 

 

Bills payable

 

 

 

               4,76,000

 

       

                   

                  88,000

                  40,000

Land                                 1,00,000

      Add :Increase                60,000 

Building                            1,00,000

      Less : Dep                       6,000 

 

Plant

Bank

Stock

Debtors

     

     1,60,000

      

       94,000

         

     2,00,000

         10,000

         80,000

         60,000

                 6,04,000        6,04,000

 

 Working Notes

Old Ratio                New Ratio

2:1:3                          1:1:1

S/R of Nardeep = Old Ratio - New Ratio= `2/6-1/3=0/6`

S/R of Hardeep = Old Ratio - New Ratio=  `1/6-1/3=-1/6=>`

S/R of Gagandeep = Old Ratio - New Ratio = `3/6-1/3=1/6=>`

Hardeep will compensate Gagandeep, since he is gaining

Hardeep’s Capital A/c                                  Dr                            50,000

              To Gagandeep’s Capital A/c                                                         50,000

Is there an error in this question or solution?

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Solution for question: 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 concept: Preparation of Revaluation Account and Balance Sheet. For the courses CBSE (Arts), CBSE (Commerce), CBSE (Science)
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