PRACTICAL PROBLEM
Minaxi, Ramesh and Poonam were partners sharing profits and losses in the proportion to their capitals, Their Balance sheet of the firm on 31st March, 2012 was as under:
Balance Sheet as on 31st March, 2012
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Liabilities
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Amount
Rs
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Assets
|
Amount
Rs
|
|
Capital
|
|
Land and Building
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40,000
|
|
Minaxi
|
30,000
|
Investment
|
20,000
|
|
Ramesh
|
20,000
|
Debtors
|
16,000
|
|
Poonam
|
10,000
|
Less: R.D.D.
|
2,000
|
14,000
|
Creditors
|
28,000
|
Stock
|
18,000
|
|
Reserve
|
18,000
|
Cash
|
14,000
|
|
|
1,06,000
|
|
1,06,000
|
|
|
|
|
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Poonam died on 1st August, 2012 and the following adjustments were made
1) Assets revalued as under-Land & Building Rs 44,000, Investment Rs 18,000, Stock Rs 17,000.
2) All debtors were good.
3) Goodwill of the firm valued at two times the average profits of the last 4 years. No goodwill account to be shown in the books of the firm.
4) Poonam’s share of profit upto her death to be calculated on the basis of average profits of last two year.
5) Profits were Rs 6,000, Rs 12,000, Rs 7,000, Rs 11,000
Prepare:
1) Profits and loss adjustment A/c
2) Balance sheet as on 1st August 2012