Question

A, B, C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as at 31st March, 2108 is as follows:
D is admitted as a new partner on 1st April, 2018 for an equal share and is to pay ₹ 50,000 as capital.
Following are the adjustments required on D’s admission:
(a) Out of the Creditors, a sum of ₹ 10,000 is due to D which will be transferred to his capital Account.
(b) Advertisement Expenses of ₹ 1,200 are to be carried forward to next accounting period as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum of ₹ 2,000 paid for B’s personal expenses.
(d) A Bill of Exchange of ₹ 4,000, which was previously discounted with the banker, was dishonoured on 31st March, 2018 but no entry has been passed for that.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to ₹ 2,100 is paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D’s admission.

Answer 1

Answer:

Profit and Loss Sharing also called PLS or "participatory" banking is a method of finance used by Islamic financial or Shariah-compliant institutions to comply with the religious prohibition on interest on loans that most Muslims subscribe to.

Explanation:

A, B, C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively

Answer 2

The necessary Ledger Accounts and Balance Sheet after D’s admission are calculated below:

Explanation:

Given,

A, B, C are partners sharing profits and losses in the ratio of 3 : 2 : 1

The new partner D pay ₹ 50,000 as capital.

Calculation of Distribution of Loss on Revaluation:

The distribution of Loss on Revaluation is calculated below:

Debit A's Capital Account

$=600 \times \frac{3}{6}=300$

Debit B's Capital Account

$=600 \times \frac{2}{6}=200$

Debit C's Capital Account

$=600 \times \frac{1}{6}=100$