Q. X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2019 was:
|
Liabilities
|
Amount
(₹)
|
Assets
|
Amount
(₹)
|
| Creditors |
15,000
|
Cash at Bank |
5,000 |
| Employees' Provident Fund |
10,000
|
Sundry Debtors |
20,000
|
|
| Workmen Compensation Reserve |
5,800
|
Less: Provision for Doubtful Debts |
600
|
19,400
|
| Capital A/cs: |
|
Stock |
|
25,000 |
| X |
70,000
|
|
Fixed Assets |
80,000 |
| Y |
31,000
|
1,01,000
|
Profit and Loss A/c |
2,400
|
| |
|
|
|
|
| |
1,31,800
|
|
1,31,800
|
| |
|
|
|
They admit Z into partnership with 1/8th share in profits on 1st April, 2019. Z brings ₹ 20,000 as his capital and ₹ 12,000 for goodwill in cash. Z acquires his share from X. Following revaluations are also made:
(a) Employees' Provident Fund liability is to be increased by ₹ 5,000.
(b) All Debtors are good.
(c) Stock includes ₹ 3,000 for obsolete items.
(d) Creditors are to be paid ₹ 1,000 more.
(e) Fixed Assets are to be revalued at ₹ 70,000.
Prepare Journal entries, necessary accounts and new Balance Sheet. Also, calculate new profit-sharing ratio.
