Question

$A,B$ and $C$ are partners sharing profits and losses in the ratio of $3:2:1$ respectively. Their Balance Sheet as at ${31}^{st}$March,2018 is as follows:

Liabilities	(Rs.)	Assets	(Rs.)
Capital A/cs: A 60,000 B 60,000 C 40,000 Creditors Bills Payable	1,60,000 30,000 10,000	Land and Building Plant and Machinery Furniture Stock Debtors Bills Receivable Bank	50,000 40,000 30,000 20,000 30,000 20,000 10,000
	2,00,000		2,00,000

$D$ is admitted as a new partners on $1^{st}$April,2018 for an equal share and is to pay $Rs.50,000$ as capital. Following are the adjustment required on $D^{\prime }s$ admission:
(a) Out of the Creditors, a sum of $Rs.10,000$ is due to $D$ which will be transferred to his capital Account.
(b) Advertisement Expenses of $Rs.1,200$ are to be carried forward to next accounting period as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum of $Rs.2,000$ paid for $B^{\prime }s$ personal expenses.
(d) A Bill of Exchange of $Rs.4,000$ which was previously discounted with the banker, was dishonoured on ${31}^{st}$March,2018 but no entry has been passed for that.
(e) A Provision for Doubtful Debts @ $5\%$ is to be created against Debtors.
(f) Expenses on Revaluation amounted to $Rs.2,100$ is paid by $A$.
Prepare necessary Ledger Accounts and Balance Sheet after $D^{\prime }s$ admission.

Answer 1

(i) REVALUATION A/C

Dr. Cr.

Particulars	Amount	Particulars	Amount
To Provision for Doubtful Debts	1700	By Prepaid advertisement Expenses	1200
To A's Capital (revenue expense)	2100	By B's Capital (personal expenses)	2000
		By Loss transferred to: - A's Capital a/c - B's Capital a/c - C's Capital a/c	300 200 100
	3800		3800

(ii) PARTNER'S CAPITAL A/C
Dr. Cr.

Particulars	A	B	C	D	Particulars	A	B	C	D
To Revaluation a/c (personal)		2000			By Balance b/d	60000	40000	40000
To Revaluation a/c (loss)	300	200	100		By Cash a/c				40000
To Balance c/d	61800	37800	39900	50000	By Creditors				10000
					By revaluation expenses	2100
	62100	40000	40000	50000		62100	40000	40000	50000

(iii) BALANCE SHEET
Dr. Cr.

Liabilities	Amount	Assets	Amount
Capital a/cs: - A - B - C - D	61800 57800 39900 50000	Land and Building	50000
Bills Payable	10000	Plant and Machinery	40000
Creditors 30000 (-) D's Capital (10000)	20000	Furniture	30000
		Stock	20000
		Prepaid Advertisement Expenses	1200
		Debtors 30000 (-) Provision for (1700) Doubtful debts (+) Bills receivable 4000 dishonoured	32300
		Bills receivable	20000
		Bank (10000+40000-4000)	46000
	239500		239500