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# Suresh, Ramesh, Mahesh and Ganesh Were Partners in a Firm Sharing Profits in the Ratio of 2 : 2 : 3 : 3. on 1st April, 2016, Their Balance Sheet Was as Follows: - CBSE (Arts) Class 12 - Accountancy

ConceptRetirement and Death of a Partner - Calculation of New Profit Sharing Ratio

#### Question

Suresh, Ramesh, Mahesh and Ganesh  were partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3. On 1st April, 2016, their Balance Sheet was as follows:

BALANCE SHEET OF SURESH, RAMESH, MAHESH AND Ganesh

as on 1st April, 2016

 Liabilities Amount(₹) Assets Amount(₹) Capital A/cs: Fixed Assets 6,00,000 Suresh 1,00,000 Current Assets 3,45,000 Ramesh 1,50,000 Mahesh 2,00,000 Ganesh 2,50,000 7,00,000 Sundry Creditors 1,70,000 Workmen Compensation Reserve 75,000 9,45,000 9,45,000

From the above date, the partners decided to share the future profits equally. For this purpose the goodwill of the firm was valued at ₹ 90,000. It was also agreed that:
(a) Claim against Workmen Compensation Reserve will be estimated at ₹ 1,00,000 and fixed assets will be depreciated by 10%.
(b) The Capitals of the partners will be adjusted according to the new profit-sharing ratio. For this, necessary cash will be brought or paid by the partners as the case may be.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

#### Solution

Revaluation Account

 Dr. Cr. Particulars Amount (₹) Particulars Amount (₹) Depreciation on Fixed Assets A/c 60,000 Revaluation Loss Provision for Claim against WCF 25,000 Suresh’s Capital A/c 17,000 Ramesh’s Capital A/c 17,000 Mahesh’s Capital A/c 25,500 Ganesh’s Capital A/c 25,500 85,000 85,000 85,000

Partners’ Capital Account

 Dr. Cr. Particulars Suresh Ramesh Mahesh Ganesh Particulars Suresh Ramesh Mahesh Ganesh Revaluation A/c 17,000 17,000 25,500 25,500 Balance b/d 1,00,000 1,50,000 2,00,000 2,50,000 Mahesh's Capital A/c 2,250 2,250 Suresh’s Capital A/c 2,250 2,250 Ganesh's Capital A/c 2,250 2,250 Ramesh’s Capital A/c 2,250 2,250 Cash A/c 25,250 75,250 Cash A/c 75,250 25,250 Balance c/d 1,53,750 1,53,750 1,53,750 1,53,750 1,75,250 1,75,250 2,04,500 2,54,500 1,75,250 1,75,250 2,04,500 2,54,500

Balance Sheet

 Liabilities Amount (₹) Assets Amount (₹) Capital A/c Fixed Assets (Less depreciation) 5,40,000 Suresh 1,53,750 Current Assets 3,45,000 Ramesh 1,53,750 Mahesh 1,53,750 Ganesh 1,53,750 6,15,000 Claim against WCF 1,00,000 Sundry Creditors 1,70,000 8,85,000 8,85,000

Working Notes
WN1:
Calculation of Gaining/Sacrificing Ratio

 Suresh’s Capital A/c Dr. 4,500 Ramesh’s Capital A/c Dr. 4,500 To Mahesh’s Capital A/c 4,500 To Ganesh’s Capital A/c 4,500 (Gaining partners compensate sacrificing partners)

Suresh = 1,00,000 – 21,500 = Rs 78,500
Ramesh = 1,50,000 – 21,500 = Rs 1,28,500
Mahesh = 2,04,500 – 25,500 = Rs 1,79,000
Ganesh = 2,54,500 – 25,500 = Rs 2,29,000
Total Combined Capital = 6,15,000

WN3Calculation of New Capital

Is there an error in this question or solution?

#### APPEARS IN

Solution Suresh, Ramesh, Mahesh and Ganesh Were Partners in a Firm Sharing Profits in the Ratio of 2 : 2 : 3 : 3. on 1st April, 2016, Their Balance Sheet Was as Follows: Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio.
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