Question

9.A and B were partners in a firm sharing profits in 3:1

ratio .On 1st April 2015 they admitted C as a new

partner for 1/4th share in the profits of the firm which

he acquired from A. Their Balance sheet on that date

was as follows:

LIABILITIES RS. ASSETS RS

Creditors

General

Reserve.

Capital

Accounts

A

B

54,000

32,000

1,00,000

70,000

Cash

Debtors

40,000-

Provision for

bad debts

3,000

Stock

Machinery

Buildings

Investment

44,000

37,000

15,000

60,000

50,000

50,000

2,56,000 2,56,000

C will bring Rs.40, 000 as his capital and the other

terms agreed upon were

i) Goodwill of the firm was valued at Rsiii) Provision for bad debts was found to be in excess by

Rs.800

iv) A liability of Rs.2, 000 included in sundry creditors

was not likely to arise.

v) The capital of the partners is adjusted on the basis of

C’s contribution of the capital to the firm.

vi) Excess or shortfall to be transferred to Current

Accounts of the partners. Prepare Revaluation

Account, Partners’ capital accounts and the Balance

sheet of the new firm​

Answer 1

Answer:

Goodwill of the firm was valued at Rsiii) Provision for bad debts was found to be in excess by

Explanation:

800 RS