Question

The following is the Balance Sheet of Vivaan and Vihaan sharing Profits and Losses in the ratio of 3 : 2 as on 31 March, 2023.

Balance Sheet as on 31st March, 2023
Liabilities	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Accounts:		Building		1,08,000
Vivaan	1,20,000	Plant and Machinery		90,000
Vihaan	1,50,000	Stock		72,000
Sundry Creditors	90,000	Debtors	63,000	60,000
Bank Overdraft	15,000	Less: R.D .D.	3,000
		Bank		30,000
		Investments		15,000
	3,75,000			3,75,000

On 1-4-2023, Prihaan is admitted on the following terms:

(1) He is to pay ₹ 1,50,000 as his capital and ₹ 60,000 as his share of Goodwill.

(2) The new profit sharing ratio is to be 5 : 3 : 2.

(3) The assets are to be revalued as under:
Building ₹ 1,50,000, Plant and Machinery ₹ 72,000.

(4) R.D.D. to be increased up to ₹ 6,000

(5) The old partners decided to keep half of the amount of goodwill in the business.

(6) Sundry creditors are to be revalued at ₹ 99,000.

Prepare Revaluation Account, Capital Accounts of Partners and Balance Sheet of new [um.

Answer 1

Dr.	In the books of the Partnership firm Revaluation Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Plant and Machinery	18,000	By Building A/c	42,000
To R.D.D. A/c	3,000
To Sundry Creditors A/c	9,000
To Profit on Revaluation transferred to Capital A/c
Vivaan	7,200
Vihaan	4,800
	42,000		42,000

 

Dr.	Partner's Capital Accounts						Cr.
Particulars	Vivaan	Vihaan	Prihaan	Particulars	Vivaan	Vihaan	Prihaan
To Bank	15,000	15,000	-	By Balance b/d	1,20,000	1,50,000	-
To Balance c/d	1,42,200	1,69,800	1,50,000	By Bank A/c	-	-	1,50,000
				By Goodwill A/c	30,000	30,000	-
				By Revaluation A/c (Profit)	7,200	4,800	-
	1,57,200	1,84,800	1,50,000		1,57,200	1,84,800	1,50,000

 

Balance Sheet as on 1st April, 2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Account			Building	1,08,000	1,50,000
Vivaan		1,42,200	Add: Appreciation	42,000
Vihaan		1,69,800	Plant & Machinery	90,000	72,000
Prihaan		1,50,000	Less: Depreciation	18,000
Sundry Creditors		99,000	Investments		15,000
Bank Overdraft		15,000	Sundry Debtors	63,000	57,000
			Less: R.D.D.	6,000
			Stock		72,000
			Bank		2,10,000
		5,76,000			5,76,000