2. 26. A, B and C were partners in a firm sharing profits and losses in the ratio of
3:2:1. They admit D into partnership with th share which he acquires from A and
B in the ratio of 2:1. On D's admission the goodwill of the firm is valued at 26,00,000
However, D is unable to bring his share of goodwill in cash.
Pass necessary journal entry and also calculate the new profit sharing ratio,
Answers
Answer:
see below
Explanation:
(i) REVALUATION A/C
Dr. Cr.
Particulars Amount Particulars Amount
To Provision for Doubtful Debts 1700 By Prepaid advertisement Expenses 1200
To A's Capital
(revenue expense) 2100 By B's Capital
(personal expenses) 2000
By Loss transferred to:
- A's Capital a/c
- B's Capital a/c
- C's Capital a/c
300
200
100
3800 3800
(ii) PARTNER'S CAPITAL A/C
Dr. Cr.
Particulars A B C D Particulars A B C D
To Revaluation a/c
(personal) 2000 By Balance b/d 60000 40000 40000
To Revaluation a/c
(loss) 300 200 100 By Cash a/c 40000
To Balance c/d 61800 37800 39900 50000 By Creditors 10000
By revaluation expenses 2100
62100 40000 40000 50000 62100 40000 40000 50000
(iii) BALANCE SHEET
Dr. Cr.
Liabilities Amount Assets Amount
Capital a/cs:
- A
- B
- C
- D
61800
57800
39900
50000 Land and Building 50000
Bills Payable 10000 Plant and Machinery 40000
Creditors 30000
(-) D's Capital (10000) 20000 Furniture 30000
Stock 20000
Prepaid Advertisement
Expenses 1200
Debtors 30000
(-) Provision for (1700)
Doubtful debts
(+) Bills receivable 4000
dishonoured 32300
Bills receivable 20000
Bank (10000+40000-4000) 46000
239500 239500