Question

16:- Madan and Mohan are partners in a firm sharing profits and losses in the ratio of 3:2. Their balance sheet as on 31 march 2020 is as follows

liabilities
creditors 28000
workmen compensation 12000
general reserve 20000
madans capital 60000
mohans capital 40000

1600000

assets 10000
cash at bank
debtors 65000
less provision for doubtful debts 5000 60000
stock 30000
investments 50000
patents 10000

160000

The partners agreed to take gopal as a partner for 1/4 share with affect from 1 April 2020 on following terms:
a) gopal shall bring 50000 as capital and 25000 as his share of premium for goodwill
b) That unaccounted accrued income of 500 be provided for
c) market value of investments was 45000
d) A debtor whose dues of 1000 we're written off as bad debts paid 800
e) A claim of 2000 on account of wormens compensation to be provided for .
f) patents are undervalued by 5000

pass the necessary journal entries to give effect to the above transactions and prepare revaluation account​

Answer 1

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Answer 2

Answer:

Madan and Mohan are partners in a firm sharing profits and losses in the ratio of 3:2

Explanation:

Sooraj’s Capital A/c (4,50,000 × 1/3)

Dr.

1,50,000

To Madan’s Capital A/c (1,50,000× 4/5)

1,20,000

To Gopal’s Capital A/c (1,50,000× 1/5)

30,000

(Being adjustment for goodwill not brought by the partner)

Goodwill A/c Dr.  4,50,000

April 01 To Madan’s Capital A/c (4,50,000 × 3/5)    2,70,000

To Gopal’s Capital A/c (4,50,000 × 2/5)    1,80,000

(Being goodwill raised in the books of accounts)    

2019    

April 01 Sooraj’s Capital A/c (4,50,000 × 1/3) Dr.  1,50,000

Madan’s Capital A/c (4,50,000 × 1/3)   1,50,000

Gopal’s Capital A/c (4,50,000 × 1/3)   1,50,000

To Goodwill A/c    4,50,000

(Being adjustment for goodwill not brought by the partner)

Net price = List price – Trade discount. Therefore, trade discounts are not recorded in the books of accounts. However, on the other hand, cash discounts are recorded in the books of accounts. Cash discounts are usually allowed on the invoice price of the goods.

Trade discounts are not recorded in the buyer's or seller's respective books of accounts. It is always subtracted prior to any kind of exchange.

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