A and B are partners sharing profit in the ratio 3:1. They admitted C as a partner by giving him 1/4th share of profit which he acquired from A and B in the ratio 2:1 C bring in 100000 as capital and 36000 as goodwill in cash. At the time of admission of C , general reserve appeared in their balance sheet 50000.
Following revaluations are also made:
1. Value of plant is to be reduced by 10000.
2. Bad debts provision is to be reduced from 4000 to 3000.
3. 2000 out of total creditors of 20000 are not to be paid.
4. There is an outstanding bill for repairs for 1200.
Pass necessary journal entries and prepare a revaluation account . Also calculate the new profit sharing ratios.
Answers
Answer:
Explanation:
Revaluation account
To Plant 10000 By Provision for d/ 1000
To out/s By Creditors 2000
Bill 1200 By Loss on revaluation A/c
A's Account 6150
B's Account 2050
11200 11200
Journal entries
Cash A/c 136000
To C's a/c 100000
To Premium 36000
Premium for goodwill 36000
To A's capital 24000
To B's capital 12000
General reserve A/c 50000
To A's Capital 37500
To B's Capital 12500