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Standard XI

Accountancy

Statement of Affairs

Following is ...

Question

Following is the balance sheet of firm:
Assets Rs.
Cash 20,000
Other Assets 1,80,000
2,00,000
Liabilities Rs.
Akbar Capital (40%) 37,000
Birbal Capital (40%) 65,000
Tansen Capital (20%) 48,000
Other Liabilities 50,000
2,00,000
If assets are fairly valued in this balance sheet and partners wishes to admit Jodha as a partner for 1/6th share, how much Jodha should contribute as a capital?

Rs. 40,000

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Rs. 36,000

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Rs.33,333

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Rs. 30,000

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Solution

The correct option is D Rs. 30,000
Liabilities 200,000
Jodha as partner of 1/6 share of 200,000 × 1/6 = 33,333
Jodha contribute as a capital of Rs. 33,333.

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PRACTICAL PROBLEM

Raj and Dev are partners sharing profits and losses 3:2 respectively. Their position on 31^st March, 2011

Balance Sheet as on 31^st March, 2011
Liabilities		Amount Rs	Assets		Amount Rs
Capital A/c’s	Raj	1,00,000	Buildings		1,00,000
	Dev	75,000	Furniture		10,000
Creditors		10,000	Stock		31,000
Bills Payable		5,000	Debtors	50,000
General Reserve		15,000	(-) R.D.D.	1,000	49,000
			Bank Balance		15,000
		2,05,000			2,05,000

On 1^st April, 2011 they admitted Manoj on following terms:

1) Manoj should bring in cash Rs 1,00,000 as a capital for 1/5^th share in future profit and Rs 25,000 as goodwill.

2) Building should be revalued for Rs 1,25,000.

3) Depreciate furniture at 12 ½ % p.a. and stock at 10% p.a.

4) R.D.D. should be maintained as it is.

5) The Capital accounts of partners should be adjusted in their new profit sharing ratio through bank account.

Prepare, Profit and Loss Adjustment Account, Capital Accounts, Balance Sheet of new firm and show how you have calculated new ratio and new capital.

Following is the Balance Sheet of Jain, Gupta and Malik as on March 31, 2002.

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

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. Balance Sheet of

J

and

K

who share profits in the ratio of

3 : 2

is as follows:

Liabilities	(Rs.)	Assets	(Rs.)
Reserves J's Capital 1,50,000 K's Capital 1,00,000	1,00,000 2,50,000	Cash Other Assets	2,00,000 1,50,000
	3,50,000		3,50,000

M

joins the firm from

1^{s t}

April, 2018 for a half share in the future profits. He is to pay

R s . 1, 00, 000

for goodwill and

R s . 3, 00, 000

for capital. Draft the Journal entries and prepare Balance Sheet in each of the following cases:
(a) If

M

acquires his share of profit from the firm in the profit-sharing ratios of the partners.
(b) If

M

acquires his share of profits from the firm in equal proportion from the original partners.
(c) If

M

acquires his share of profit in the ratio

3 : 1

from the original partners, ascertain the future profit-sharing ratio of the partners in each case.

PRACTICAL PROBLEM

Suresh and Ramesh are partners in a business sharing Balance sheet as on 31^st March, 2013 is as follows:

Balance Sheet as on 31^st March, 2013
Liabilities		Amount Rs	Amount Rs	Assets	Amount Rs	Amount Rs
Capital A/c’s				Building		30,000
	Suresh	50,000		Machinery		10,000
	Ramesh	24,000	74,000	Furniture		9,500
Creditors			57,000	Debtors	40,000
Bills Payable			20,000	(-) R.D.D.	1,000	39,000
Reserve fund			9,000	Stock		30,000
				Bills Receivable		7,600
				Cash at Bank		33,900
			1,60,000			1,60,000

They admitted Kailash on 1^st April, 2013 as a partner on the following terms:

1) Kailash will bring Rs 30,000 as his capital for 1/4^th share in future profit and Rs 12,000 as goodwill which will be withdrawn by old partners.

2) Stock and Machinery to be depreciated by 10%.

3) R.D.D. is to be maintained at 5% on debtors.

4) Building to be appreciated by 20% and furniture is revalued at Rs 10,000.

Prepare Profit and Loss Adjustment Account, Partner’s Capital Accounts and Balance Sheet of the New firm.

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

1^{s t}

April, 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

{\frac{1}{3}}^{r d}

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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Assets	Rs.
Cash	20,000
Other Assets	1,80,000
	2,00,000
Liabilities	Rs.
Akbar Capital (40%)	37,000
Birbal Capital (40%)	65,000
Tansen Capital (20%)	48,000
Other Liabilities	50,000
	2,00,000

The correct option is D Rs. 30,000Liabilities 200,000Jodha as partner of 1/6 share of 200,000 × 1/6 = 33,333Jodha contribute as a capital of Rs. 33,333.

The correct option is D Rs. 30,000
Liabilities 200,000
Jodha as partner of 1/6 share of 200,000 × 1/6 = 33,333
Jodha contribute as a capital of Rs. 33,333.