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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

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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

Adjustment for Goodwill

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)        


WN2Calculation of Adjusted Capital
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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