Question

A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1 . Their Balance Sheet as on 31st March, 2015 was as follows:
From 1st April, 2015, A, B and C decided to share profits equally. For this it was agreed that:
(i) Goodwill of the firm will be valued at ₹ 1,50,000.
(ii) Land will be revalued at ₹ 80,000 and building be depreciated by 6%.
(iii) Creditors of ₹ 6,000 were not likely to be claimed and hence should be written off.
Prepare Revaluation Account , Partners Capital Accounts and Balance Sheet of the reconstituted firm.

Answer 1

Sacrifice of the A = Old ratio- New ratio = $\frac{3}{6}$ - $\frac{1}{3}$ = $\frac{1}{6}$

Sacrifice of the B = Old ratio- New ratio = $\frac{2}{6}$ - $\frac{1}{3}$ = Nil

Sacrifice of the C  = Old ratio- New ratio = $\frac{1}{6}$ - $\frac{1}{3}$ = $\frac{1}{6}$

Explanation:

Old ratio :     3  :2 :1

New ratio :    1:  1 :1

Sacrifice of the A = Old ratio- New ratio = $\frac{3}{6}$ - $\frac{1}{3}$ = $\frac{1}{6}$

Sacrifice of the B = Old ratio- New ratio = $\frac{2}{6}$ - $\frac{1}{3}$ = Nil

Sacrifice of the C  = Old ratio- New ratio = $\frac{1}{6}$ - $\frac{1}{3}$ = $\frac{1}{6}$