Maharashtra State BoardHSC Arts 12th Board Exam
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Rani and Geeta Are Partners Sharing Profits and Losses 3:2 Respectively. Their Position on 31st March, 2013 Was as Follows - Book Keeping and Accountancy

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Rani and Geeta are partners sharing profits and losses 3:2 respectively. Their position on 31st March, 2013 was as follows

Balance sheet as on 31st March, 2013.

Liabilities
Amount (Rs.)
Assets
Amount (Rs.)
Amount (Rs.)
Capital Accounts
 
Building
 
100000
Rani
100000
Furniture
 
10000
Geeta
75000
Stock
 
31000
Creditors
10000
Debtors
50000
 
Bills Payable
5000
Less: R.D.D.
-1000
49000
General Reserve
15000
Bank Balance
 
15000
 
205000
   
205000
On 1st April, 2013 hey admitted suvarna on the following terms:

(1) Suvarna should bring in cash Rs. 1,00,000 as capital for 1/5 th share in future profit and Rs. 25,000 as goodwill.

(2) Building should be revalued at Rs. 1,25,000.

(3) Depreciate furniture @ 12.5 % and stock @ 10% p.a.

(4) R.D.D. should be maintained as it is.

(5) The Capital Accounts of partners should be adjusted in their new profit sharing ratio through bank account.

Prepare: Profit and loss adjustment account, capital account and balance sheet of the new firm.
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Solution

In the books of the firm

Profit and Loss Adjustment A/c

Particulars
Amount Rs.
Amount Rs.
Particulars
Amount Rs.
Amount Rs.
To Furniture A/c
 
1250
By Building A/c
 
25000
To Stock A/c
 
3100
     
To Revaluation Profit :
         
Rani Capital A/c
12390
       
Geeta Capital A/c
8260
20650
     
   
25000
   
25000

Partners’ Capital Accounts

Particulars
Rani
Geeta
Suvarna
Particulars
Rani
Geeta
Suvarna
       
By Balance b/d
100000
75000
 
       
By Bank A/c
   
100000
       
By General Reserve A/c
9000
6000
 
       
By Goodwill A/c
15000
10000
 
       
By Profit and Loss Adjustment A/c
12390
8260
 
To Balance C/d
240000
160000
100000
By Bank A/c
103610
60740
 
 
240000
160000
100000
 
240000
160000
100000

Balance Sheet as on 1st April, 2013

Liabilities
Amount
Rs.
Amount
Rs.
Assets
Amount
Rs.
Amount
Rs.
Capital A/c:
   
Building
100000
 
Rani
240000
 
Add: Appreciation
25000
125000
Geeta
160000
 
Furniture
10000
 
Suvarna
100000
500000
Less: Depreciation
1250
8750
Creditors
 
10000
Stock
31000
 
Bills Payable
 
5000
Less: Written off
3100
27900
     
Debtors
50000
 
     
Less: R.D.D.
1000
49000
     
Bank Balance
 
304350
   
515000
   
515000

Working notes :

Suvarna’s share =`1/5`

Therefore, rani’s share = `4/5 xx 3/5 = 12/25`

Geeta’s share = `4/5 xx 2/5 = 8/25`

New ratio = 12 : 8 : 5

New capital = 100000 x 5 = 500000

Concept: Reconstitution of Partnership
  Is there an error in this question or solution?

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