Maharashtra State BoardHSC Arts 12th Board Exam
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The Balance Sheet of Meena and Heena Who Shared the Profits and Losses in the Ratio of 2 : 1 is as Under : - Book Keeping and Accountancy

Ledger

The Balance Sheet of Meena and Heena who shared the profits and losses in the ratio of 2 : 1 is as under :

Balance Sheet as on 31st March, 2016

Liabilities Amount Assets Amount
Capital :   Leasehold property 20,000
Meena 1,34,000 Livestock 6,600
Heena 1,20,000 Loose tools 90,200
Creditors 53,800 Stock 86,800
Rent outstanding 10,000 Debtors                        48,000  
Reserve fund 7,200 Less : R.D.D.                  2,000 46,000
    Bank 75,400
  3,25,000   3,25,000

On 1st April, 2016 Seema was admitted as `1/4` th partner on the following terms :

1. Seema should bring in Rs 1,20,000 towarsds her capital. 

2.Firm's goodwill is valued at Rs 1,44,000 and Seema agreed to bring her share in the firm's goodwill by a cheque.

3.Reserve for doubtful bebts should be maintained at 7.5% on debtors.

4.Increase live stock by Rs 4,400 and write off loose tools by 20%.

5.Outstanding rent Rs 9,040 is paid in full settlement.

Prepare :

1. Profit and Loss Adjustment Account.

2. Partners' Capital Account . 

3. Balance Sheet of the new firm

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Solution

In the books of firm
Profit and Loss Adjustment A/C

Particulars Amount Particulars Amount
To Reserve for Doubtful Debts 1,600 By livestock 4400
To Loose Tools 18,040 By outstanding Rent 960
    By Loss trusters to  
    Meena's capital A/c 9520
    Heena's capital A/c    4760
      14,280
  19,640   19,640

Partner's Capital A/c

Particulars
Meena
Heena
Seema
Particulars
Meena
Heena
Seeema
To Profit & Loss Adj. A/c
9,520
4,760
 
By Balance b/d
134,000
120,000
 
To Balance C/d
153,280
129,640
120,000
By Reserve Fund A/c
4,800
2,400
 
       
By Bank A/c
   
120,000
       
By Goodwill A/c
24,000
12,000
 
               
 
162,800
134,400
120,000
 
162,800
134,400
120,000

Balance Seheet

as on Ist April, 2016

Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Capital Accounts:
   
Leasehold Property
 
20000
Meena
153280
 
Live  Stock
6600
 
Heena
129640
 
Add: Appreciation
4400
11000
Seema
120000
402920
Loose Tools
90200
 
Creditors
 
53800
Less: Depreciation
18040
72160
     
Stock
 
86800
     
Debtors
48000
 
     
Less: R.D.D.
(-3600)
44400
     
Bank
 
222360
   
456720
   
456720

Working Notes :
1) Reserve for doubtful bebts :
Debtors                                                    = 48,000
(-) R.D.D. [ 7.5% on 48,000 ]                        3,600   
                                                                   44400

2) Bank : 
     Opening Balance                = 75,400
    (+) Seema share                  = 120,000
    (+) Premium on goodwill    =  36,000
    (-) Outstanding rent paid    =    9,040   
                                                = 222,360

3) Goodwill already calculated i.e; Rs. 1,44,000

Concept: Admission of a Partner - Adjustment of Accumulated Profits and Losses
  Is there an error in this question or solution?
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