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Question
Ram and Krishna were partners sharing profits and losses in the proportion of 2/3 and 1/3 respectively. Their balance sheet is as follows :
Balance sheet as on 31st March , 2013
| Liabilities | Amount (₹) | Assets | Amount (₹) |
||
| Capital A/c | Building | 100000 | |||
| Ram | 96000 | 160000 | Furniture | 30000 | |
| Krishna | 64000 | Sundry Debtors | 63000 | 60000 | |
| General Reserve | 18000 | Less : R.D.D | (3000) | ||
| Profit and loss A/c | 6000 | Stock | 84000 | ||
| Sundry Creditors | 80000 | Cash | 16000 | ||
| Ram's loan | 26000 | ||||
| 290000 | 290000 | ||||
On 1st April 2013 , Hari is admitted in the partnership on the following terms :
(1) Hari should bring in cash ₹ 48000 as capital for 1/5 share in future profit.
(2) Goodwill was raised in the books of the firm for ₹ 18000.
(3) Building is revalued at ₹ 112000 and the value of stock to be reduced by ₹ 6000.
(4) Reserve for doubtful debts be maintained at ₹ 1800.
(5) Ram's loan is to be repaid.
Prepaid : Revaluation account , Capital accounts of partners and Balance sheet of the new firm.
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Solution
In the books of Ram, Krishna and Hari.
Revaluation Account.
|
Particulars
|
Amount
|
Amount
|
Particulars
|
Amount
|
Amount
|
|
To Stock A/c
|
6000
|
By Building A/c
|
12000
|
||
| To Profit on Revaluation A/c transferred to Partners Capital A/c |
By R.D.D. A/c
|
1200
|
|||
|
Ram Capital A/c
|
4800
|
7200
|
|||
|
Krishna Capital A/c
|
2400
|
||||
|
13200
|
13200
|
||||
Partners’ Capital A/c
|
Particulars
|
Ram
|
Krishna
|
Hari
|
Particulars
|
Ram
|
Krishna
|
Hari
|
|
By Balance b/d
|
96000
|
64000
|
-
|
||||
|
By General Reserve A/c
|
12000
|
6000
|
-
|
||||
|
By Profit & Loss A/c
|
4000
|
2000
|
|||||
|
By Revaluation A/c
|
4800
|
2400
|
-
|
||||
|
By Cash A/c
|
48000
|
||||||
| By Balance c/d | 128800 | 80400 | 48000 |
By Goodwill A/c
|
12000
|
6000
|
-
|
|
128800
|
80400
|
48000
|
128800
|
80400
|
48000
|
Balance Sheet as on 1st April, 2013.
|
Liabilities
|
Amount
|
Amount
|
Assets
|
Amount
|
Amount
|
|
Capital A/c
|
Building
|
100000
|
|||
|
Ram
|
128800
|
Add: Appreciation
|
12000
|
112000
|
|
|
Krishna
|
80400
|
Furniture
|
30000
|
||
|
Hari
|
48000
|
257200
|
Debtors
|
63000
|
|
|
Sundry Creditors
|
80000
|
Less: R.D.D.
|
1800
|
61200
|
|
|
Stock
|
84000
|
||||
|
Less: Written off
|
6000
|
78000
|
|||
|
Goodwill
|
18000
|
||||
|
Cash
|
18000
|
||||
|
Cash
|
16000
|
||||
|
Add: Hari’s Capital
|
48000
|
||||
|
Less: Ram’s Loan
|
26000
|
38000
|
|||
|
337200
|
337200
|
||||
