Question

The Balance Sheet of X , Y and Z who shared profits in the ratio of 5 : 3 : 2 , as on 31st March, 2018 was as follows:

Liabilities		₹	Assets	₹
Sundry Creditors		39,750	Bank( Minimum Balance)	15,000
Employees Provident Fund		5,250	Debtors	97,500
Workmen Compensation Reserve		22,500	Stock	82,500
Capital A/cs:			Fixed Assets	1,87,500
X	1,65,000
Y	84,000
Z	66,000	3,15,000
		3,82,500		3,82,500

Y retired on the above date and it was agreed that:
(i) Goodwill of the firm is valued at ₹ 1,12,500 and Y's share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3 : 2.
(ii) Fixed Assets be appreciated by 20% .
(iii) Stock be reduced to ₹ 75,000.
(iv) Y be paid amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio.
Prepare Revaluation Account , Capital Accounts of all partners and the Balance Sheet of the New Firm.

Answer 1

Revaluation Account
Dr.					Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
Stock			7,500	Fixed Assets		37,500
Revaluation Profit
X’s Capital A/c		15,000
Y’s Capital A/c		9,000
Z’s Capital A/c		6,000	30,000
			37,500			37,500

Partners’ Capital Accounts
Dr.								Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
Y’s Capital A/c	11,250		22,500	Balance b/d	1,65,000	84,000	66,000
Bank		1,33,500		General Reserve	11,250	6,750	4500
Balance c/d	2,20,500		1,47,000	Revaluation (Profit)	15,000	9,000	6,000
				X’s Capital A/c		11,250
				Z’s Capital A/c		22,500
				Bank A/c	40,500		93,000
	2,31,750	1,33,500	1,69,500		2,31,750	1,33,500	1,69,500

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets	Amount (₹)
Sundry Creditors		39,750	Bank	15,000
Employees Provident Fund		5,250	Debtors	97,500
Capitals:			Stock	75,000
X	2,20,500		Fixed Assets	2,25,000
Z	1,47,000	72,000
		4,12,500		4,12,500

Working Notes:
New Capital = 1,80,000 + 54,000 + 1,33,500 = Rs 3,67,500

$\begin{array}{l}X\text{'}s\mathrm{New}\mathrm{Capital}=3,67,500\times \frac{3}{5}=2,20,500\\ Z\text{'}s\mathrm{New}\mathrm{Capital}=3,67,500\times \frac{2}{5}=1,47,500\end{array}$

X brings in Rs 40,500 (2,20,500 – 1,80,000)

Z brings in Rs Rs93,000 (1,47,500 – 54,000)