Question

Sundar and Suresh are partners sharing profits in the ratio of 3 : 2. Their balance sheet as on 1^st January, 2017 was as follows:

Liabilities	₹	₹	Assets	₹
Capital accounts:			Buildings	40,000
Sundar	30,000		Furniture	13,000
Suresh	20,000	50,000	Stock	25,000
Creditors		50,000	Debtors	15,000
General reserve		10,000	Bills receivable	14,000
Workmen compensation fund		15,000	Bank	18,000
		1,25,000		1,25,000

They decided to admit Sugumar into partnership for 1/4 share in the profits on the following terms:

1. Sugumar has to bring in ₹ 30,000 as capital. His share of goodwill is valued at ₹ 5,000. He could not bring cash towards goodwill.
2. That the stock be valued at ₹ 20,000.
3. That the furniture be depreciated by ₹ 2,000.
4. That the value of building be depreciated by 20%.

Prepare necessary ledger accounts and the balance sheet after admission.

Answer 1

Dr.	Revaluation Account			Cr.
Particulars	₹	Particulars		₹
To Building	8,000	Loss transferred to
To Furniture	2,000	Sundar capital	9,000
To Stock	5,000	Suresh capital	6,000	15,000
	15,000			15,000

 

Dr.	Capital Account						Cr.
Particulars	Sundar	Suresh	Sugumar	Particulars	Sundar	Suresh	Sugumar
To Revaluation Loss	9,000	6,000	-	By Balance b/d	30,000	20,000	-
				By General Reserve	6,000	4,000	-
To Balance c/d	39,000	26,000	25,000	By Workers compensation fund	9,000	6,000	-
				By Bank	-	-	25,000
				By Goodwill	3,000	2,000	-
	48,000	32,000	25,000		48,000	32,000	25,000

Balance Sheet as on 31.12.17

Liabilities	₹	₹	Assets	₹	₹
Creditors		50,000	Buildings	40,000
Capital Account			(−) Revalued	8,000	32,000
Sundar Cap	39,000		Furniture	13,000
Suresh Cap	26,000		(−) Revalued	2,000	11,000
Sugumar Cap	25000	90,000	Stock	25,000
			(−) Revalued	5,000	20,000
			Debtors		15,000
			Bills Receivable		14,000
			Bank	18,000
			(+) Sugumar Cap	25000	43,000
			Goodwill		5,000
		1,40,000			1,40,000