Question

A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a partner on 1st April, 2018 on which date the Balance Sheet of the firm was:
You are required to prepare the Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm after considering the following:
(a) C brings in ₹ 30,000 as capital for 1/4th share. He also brings ₹ 10,000 for his share of goodwill.
(b) Part of the Stock which had been included at cost of ₹ 2,000 had been badly damaged in storage and could only expect to realise ₹ 400.
(c) Bank Charges had been overlooked and amounted to ₹ 200 for the year 2017-18.
(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2017-18.
(e) A credit for goods for ₹ 800 had been omitted from both purchases and creditors although the goods had been correctly included in Stock.
(f) An expense of ₹ 1,200 for insurance premium was debited in the Profit and Loss Account of 2017-18 but ₹ 600 of this are related to the period after 31st March, 2018.

Answer 1

Answer:

A company's balance sheet, also known as a "statement of financial position," reveals the firm's assets, liabilities and owners' equity (net worth). The balance sheet, together with the income statement and cash flow statement, make up the cornerstone of any company's financial statements.

Explanation:

and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a partner on 1st April, 2018 on which date the Balance Sheet of the firm was:

You are required to prepare the Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm after considering the following:

(a) C brings in ₹ 30,000 as capital for 1/4th share. He also brings ₹ 10,000 for his share of goodwill.

(b) Part of the Stock which had been included at cost of ₹ 2,000 had been badly damaged in storage and could only expect to realise ₹ 400.

(c) Bank Charges had been overlooked and amounted to ₹ 200 for the year 2017-18.

(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2017-18.

(e) A credit for goods for ₹ 800 had been omitted from both purchases and creditors although the goods had been correctly included in Stock.

(f) An expense of ₹ 1,200 for insurance premium was debited in the Profit and Loss Account of 2017-18 but ₹ 600 of this are related to the period after 31st March, 2018.

Answer 2

The Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm are calculated below:

Explanation:

Given,

A and B are partners in a firm sharing profits in the ratio of 3 : 2.

C brings in ₹ 30,000 as capital for 1/4th share.

Depreciation on Building of ₹ 3,000 had been omitted,

Calculation of Sacrificing Ratio

Old Ratio A and B =3: 2

Sacrificing Ratio =3: 2

Calculation of Distribution of Premium for Goodwill

The Distribution of Premium for Goodwill  are calculated as below:

$A^{\prime} s=10,000 \times \frac{3}{5}=6,000$

$B^{\prime} s=10,000 \times \frac{2}{5}=4,000$