$Balance Sheet$
$as on March 31,2007$
$\begin{matrix} Capital and Liabilities & Amt. (Rs) & Assets & Amt. (Rs) Sundry Creditors & 19, 800 & Land and Building & 26, 000 Telephone Bills & 300 & Bonds & 14, 370 Outstanding & 8, 950 & Cash & 5, 500 Accounts Payable & Bills Receivable & 23, 450 Accumulated Profits & 16, 750 & Sundry Debtors & 26, 700 Capital & Stock & 18, 100 Jain 40, 000 & Office Furniture & 18, 250 Gupta 60, 000 & Plant and Machinery & 20, 230 Malik 20, 000 - ------ - & 1, 20, 000 & Computers & 13, 200 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 65, 800 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 65, 800 - -------- - - -------- - \end{matrix}$

The partners have been sharing profits in the ratio of 5 : 3 : 2. Malik decides to retire from business on April 1, 2002 an d his share in the business is to be calculated as per the following terms of revaluation of assets and liabilities : Stock, Rs. 20,000; office furniture, Rs. 14,250; plant and machinery Rs. 23,530; land and building Rs. 20,000; A provision of Rs. 1,700 to be created for doubtful debts. The goodwill of the firm is valued at Rs. 9,000.

The continuing partners agreed to pay Rs. 16,500 as cash on retirement of Malik, to be contributed by continuing partners in the ratio of 3:2. The balance in the capital account of Malik will be treated as loan. Prepare revaluation account, capital accounts and balance sheet of the reconstituted firm.

Q. A and B are partners with the capital Rs.50,000 and Rs.40,000 respectively.They share profits and losses equally. C is admitted on bringing Rs.50,000 as capital only and nothing was brought against goodwill. Goodwill in Balance sheet of Rs.10,000 is revalued as 30,000.What will be value of goodwill in the books after the admission of C?

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The correct option is B Rs 88,000 A`s capital before revaluation = Rs. 1,00,000 Revaluation loss = Rs. 60,000 - Rs. 40,000 = Rs. 20,000 A`s share in loss= Rs. 20,000 X 3/5 = Rs. 12,000 New capital = Rs. 1,00,000 - Rs. 12,000 = Rs. 88,000

The correct option is B
Rs 88,000

A`s capital before revaluation = Rs. 1,00,000

Revaluation loss = Rs. 60,000 - Rs. 40,000 = Rs. 20,000

A`s share in loss= Rs. 20,000 X 3/5 = Rs. 12,000

New capital = Rs. 1,00,000 - Rs. 12,000 = Rs. 88,000