Question

3 Anita, Sunita and Kavita were partners in a business sharing Profits and Losses in the ratio of 2:2:1 respectively. Their Balance Sheet as on 31st March 2019 is as under. <br />
Balance Sheet as on 31st March, 2019 <br />
Liability <br />
Amt (`) <br />
Amt (`) <br />
Assets <br />
Amt (`) <br />
Amt (`) <br />
Capital A/c : <br />
Plant & Building <br />
55,800 <br />
Anita <br />
40,000 <br />
Investment <br />
30,000 <br />
Sunita <br />
40,000 <br />
Furniture <br />
16,000 <br />
Kavita <br />
20,000 <br />
Debtors <br />
20,800 <br />
Creditors <br />
30,000 <br />
Less: R.D.D. <br />
800 <br />
20,000 <br />
Bills Payable <br />
2,000 <br />
Bank <br />
8,200 <br />
Bank Loan <br />
8,000 <br />
Goodwill <br />
10,000 <br />
1,40,000 <br />
1,40,000 <br />
On 1st July 2019 Kavita died and the following adjustment were made: <br />
1. All the Debtors were considered as good. <br />
2. A contingent liability for a compensation of ` 900 was provided. <br />
3. Investment were sold out in the market at 10% profit. <br />
4. Loan were paid off. <br />
5. Land and Building were depreciated by ` 800 and Furniture by ` 1100. <br />
6. Goodwill of the firm was valued at ` 15000. It was to be raised in the Books. <br />
7. Kavita was entitled to get her share in the profit upto the date of her death. Profit for 2019-20 was estimated at `10,000. <br />
8. The amount due to Kavita’s executors was paid by NEFT. <br />
Prepare : Revaluation Account, Partners Capital Account, Balance sheet of new firm.​

Answer 1

Answer:

Investment were sold out in the market at 10% profit. <br />

4. Loan were paid off. <br />

5. Land and Building were depreciated by ` 800 and Furniture by ` 1100. <br />

6. Goodwill of the firm was valued at ` 15000. It was to be raised in the Books. <br />

7. Kavita was entitled 75790

Answer 2

Explanation:

• Partner’s Capital Account Cr. Dr.
• Anita Sunita Kavita Particulars (`) (`) (`) To Kavita’s 42,400 40,000 20,000
• Executor’s By Balance b/d 400 400 200
• Loan A/c
• To Balance c/d 21,700
• By Revaluation A/c (Profit)
• By Goodwill A/c 2,000 2,000 1,000
• By Profit and Loss Suspense A/c 500 21,700 42,400 21,700

Balance Sheet as on 1st July 2019

• Liabilities Amt ` Assets Amt ` 55,000
• Capital Account : Land & Building 20,800
• Anita 14,900 Sunita 42,400
• Debtors 11,500 Creditors 15,000
• Bills Payable 42,400
• Furniture 500
• Contingent Liability 30,000
• Bank 1,17,700 2,000
• Goodwill 900
• Profit and Loss Suspense A/c 1,17,700 .

Working Note :

1. Calculating Kavita’s share in the profit till date of her death.

2. Kavita died on 1st July 2019.
   Profit for 2019-20 is estimated at ` 10,000 Kavita’s share in it for 3  
   months is `10,000 × 3 × 1 = ` 500 12 5

3. Kavita’s Executors loan account was fully paid, hence it is not
   transferred to liability side.