R, S and T 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 A,B and C as on 31-3-2015
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
|
Creditors Bills Payable General Reserve Capitals R 1,00,000 S 50,000 T 25,000 |
50,000 20,000 30,000
1,75,000 |
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 |
R,S and T decided to share the profits equally with effects from 1.4.2015. For this it was agreed that:
(a) Goodwill of the firm will be valued at Rs.1,50,000
(b) Land will be revalued at Rs.80,000 and building be depreciated by 6%.
(c) Creditors of Rs.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.
Solution
Revaluation Account
Dr. Cr.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
|
To Building A/c
To Revaluation Profit R 5,500 S 11,000 T 16,500 |
3,000
33,000 |
By Land A/c By Creditors A/c
|
30,000 6,000
|
| 36,000 | 36,000 |
Partner’s Capital Account
Dr. Cr.
| Particulars | R (Rs.) | S (Rs.) | T (Rs.) | Particulars | R (Rs.) | S (Rs.) | T (Rs.) |
|
To T’s Capital A/c
To Balance c/d
|
25,000
85,500
|
71,000
|
81,500
|
By Balance B/d By Revaluation Profit By General Reserve By R’s Capital A/c
|
1,00,000 5,500 5,000
|
50,000 11,000 10,000
|
25,000 16,500 15,000 25,000
|
| 1,10,500 | 71,000 | 81,500 | 1,10,500 | 71,000 | 81,500 |
Balance Sheet
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
|
Capital R 85,500 S 71,000 T 81,500
Creditors 50,000 Less : Written off 6,000
Bills payable
|
2,38,000
44,000
20,000
|
Land 50,000 Add :Increase 30,000 Building 50,000 Less : Dep 3,000 Plant Bank Stock Debtors
|
80,000
47,000 1,00,000 5,000 40,000 30,000
|
| 3,02,000 | 3,02,000 |
Working Notes
Old Ratio New Ratio
1:2:3 1:1:1
S/R of R = Old Ratio - New Ratio =`1/6-1/3=1/6=>` Gainning
S/R of S = Old Ratio - New Ratio =`2/6-1/3=0/6`
S/R of T = Old Ratio - New Ratio =`3/6-1/3=-1/6=>`Sacrificing
R will compensate T, since he is gaining
R’s Capital A/c Dr 25,000
To T’s Capital A/c 25,000
