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Question

Balance Sheet as on 31.03.2012
Liabilities Amount
Rs.
Assets Amount
Rs.
Capital:
Ram
Madan
General reserve
Sundry creditors

1,00,00
1,00,00
40,000
55,300
Plant and machinery
Furniture
Sundry debtors 92,600
Less: R.D.D 1,000
Stock
Cash in hand
Cash at bank
90,000
15,000
91,000
68,000
4,200
27,100
2,95,300 2,95,300
Ram and Madan were partners in a firm sharing profits and losses equally. Following was their balance Sheet as on 31.03.2012:
On 1stApril, 2012, Soham was admitted as a partner in the firm on the following terms:
(1) Soham is to bring in Rs. 1,00,000 as his capital. He is to be given 13rd share in future profits.
(2) Goodwill of the firm to be raised at Rs. 30,000. It was decided that 'goodwill' should not appear in the books of the new firm.
(3) Furniture to be depreciated by 10%. Stock was valued at Rs. 70, 500.
Prepare:
(1) Profit and Loss Adjustment Account.
(2) Partner's Capital Accounts.
(3) Balance Sheet of the new firm.

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Solution

Calculation of new ratio
Ram & Madan are partners in equal ratio
New ratio = old ratio × balance ratio
Ram =12×2×3=26
Madam =12×2×3=26
Soham =13×22=26

Therefore new ratio =1:1:1

1172512_978775_ans_4268b538defd4be4a2023fc0bc6228e5.png

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Q.

Mohan and Mahesh were partners in a firm sharing profit in the ratio of 3 : 2. On 1st April, 2012, they admitted Nusrat as a partner in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under :

BALANCE SHEET OF MOHAN AND MAHESH

as on 1st April, 2012
LiabilitiesAmount AssetsAmount (Rs) (Rs)Creditors2,10,000Cash in Hand1,40,000Workmen's Compensation Fund2,50,000Debtors1,60,000General Reserves1,60,000Stock1,20,000Capital :Machinery1,00,000 Mohan1,00,000Buildings2,80,000 Mahesh80,000––––––1,80,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯8,00,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯8,00,000

It was agreed that :

(i) The value of building and stock be appreciated to Rs 3,80,000 and Rs 1,60,000 respectively.

(ii) The liabilities of Workmen's Compensation Fund was determined at Rs 2,30,000.

(iii) Nusrat brought in her share of goodwill Rs 1,00,000 in cash.

(iv) Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustment are carried out.

(v) The further profit sharing ratio will be Mohan 2/5th, Mahesh 2/5th, Nusrat 1/5th. Prepare Revaluation Account Partners' Capital Account and Balance Sheet of the new firm. Also show clearly the calculation of capital brought by Nusrat.

OR

Kushal, Kumar and Kavita were partners in a firm sharing profits in the ratio of 3 : 1 : 1. On 1st April, 2012, their Balance Sheet was as follows:

BALANCE SHEET OF KUSHAL, KUMAR AND KAVITA
as on 1st April, 2012
LiabilitiesAmount AssetsAmount (Rs) (Rs) Creditors1,20,000Cash in Hand70,000Bills Payable1,80,000Debtors2,00,000General Reserves1,20,000Less : Provision10,000––––––1,90,000Capital :Stock2,20,000 Kushal3,00,000Furniture1,20,000 Kumar2,80,000––––––––Building3,00,000 Kavita3,00,000––––––––8,80,000Land4,00,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯13,00,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯13,00,000

On the above date Kavita retired and the following was agreed.

(i) Goodwill of the firm was valued at Rs 40,000.

(ii) Land was to be appreciated by 30% and building was to be depreciated by Rs 1,00,000.

(iii) Value of furniture was to be reduced by Rs 20,000.

(iv) Bad debts reserve is to be increased to Rs 15,000.

(v) 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her loan account.

(vi) Capital of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any, in their capital account will be adjusted through current accounts.

Prepare Revaluation Account, Partner's Capital Account and Balance Sheet of Kushal and Kumar after Kavita's retirement.

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