3: Anand and Rohit are partners sharing profits and losses in the ratio of 4:1. Their Balance
Sheet as on 31 st March 2018 was as follows:
Balance Sheet As on 31st March, 2018
Liabilities
Amount ()
Assets
Amount )
Capitals :
Goodwill
90,000
Anand
1,35,000 Equipments
45,000
Rohit
75,000 Stock
54,000
Reserve Fund
90,000 Debtors
1,20,000
Creditors
54,000 Cash
51,000
Bills Payable
6,000
3,60,000
3,60,000
They agreed to Admit Nachiket on the following terms:
1 The Goodwill is to be written off after admission of Nachiket.
2
1/4th of equipments to be written off.
3 Stock is undervalued by 10% and it is to be adjusted properly.
4
Debtors of 1,800 are not recoverable.
5
Nachiket will introduce * 1,20,000 for 2/5th share of firm
6
Anand withdrew * 60,000 from business.
Prepare Revaluation A/c & Pass Journal entries of Goodwill
139
Answers
Answer:
ANSWER
(i) JOURNAL 1. Cash a/c... Dr. 10500 To C's Capital a/c 7500 To Premium for goodwill a/c 3000 (Being capital and premium for goodwill brought in by C) 2. Premium for goodwill a/c... Dr. 3000 To A's Capital a/c 2000 To B's Capital a/c 1000 (Being premium for goodwill distributed among the partners in the ratio of 2:1) 3. Building a/c... Dr. 2500 To Revaluation a/c 2500 (Being increase in asset transferred to revaluation account) 4. Revaluation a/c.... Dr. 1750 To Plant and Machinery a/c 875 To Stock a/c 500 To Provision for doubtful debts a/c 375 (Being decrease in assets and increase in liabilities transferred to revaluation account) 5. Revaluation a/c... Dr. 750 To A's Capital a/c 500 To B's Capital a/c 250 (Being profit on revaluation transferred to the partner's capital accounts) (ii) REVALUATION A/C Dr. Cr. Particulars Amount (in Rs.) Particulars Amount (in Rs.) To Stock a/c 500 By Building a/c 2500 To Plant and Machinery a/c 875 To Provision for doubtful debts a/c 375 To Profit transferred to - A's Capital a/c - B's Capital a/c 500 250 TOTAL 2500 TOTAL 2500 (iii) PARTNER'S CAPITAL A/C Particulars A B C Particulars A B C By Balance b/d 15000 10000 - By Cash a/c - - 7500 To Balance c/d 17500 11250 7500 By Premium for goodwill a/c 2000 1000 - By Revaluation a/c 500 250 - (iv) BALANCE SHEET (after admission of C) Liabilities Amount (in Rs.) Assets Amount (in Rs.) Building (25000+2500) 27500 Capital - A - B - C 17500 11250 7500 Plant and Machinery (17500-875) 16625 Sundry Creditors 32950 Stock (10000-500) 9500 Debtors 4850 -- Provision for Doubtful debts (375) 4475 Cash (600+10500) 11100 TOTAL 69200 TOTAL 69200
Answer:
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