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Question - Reconstitution of Partnership Examples and Solutions

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Question

Akash and Suraj are partners in a firm sharing profits and losses in the ratio 3 : 2. Their balance sheet as on 31st March, 2013 was as follows:

                                Balance Sheet as on

                                  31st March, 2013

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)

Capital A/c

          Akash

          Suraj

 

50000

50000

Furniture2100

General Reserve

10000Stock28700
Sundry creditors60000Land and building35000
Bills payable17000Plant and machinery49000
  Sundry debtors63000
  Cash9200
 187000 187000

They agreed to admit Sanjay in their partnership on 1st April, 2013, on the following terms :

  1. Sanjay should bring Rs. 1,500, as his share of goodwill in the firm, and Rs. 2,000 as his capital.
  2. Reserve for doubtful debts is to be provided @ 5% on debtors.
  3. Land and building be depreciated at 10% p. a.
  4. Plant and machinery to be depreciated @ 5% and stock to be depreciated @ 10% p. a.
  5. The new profit sharing ratio will be 2 : 1 : 1.

Prepare :

  1. Revaluation Account.
  2. Partners’ Capital Accounts.
  3. New Balance Sheet of the firm.

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