Accountancy, asked by faizanbhat7624, 11 months ago

Amit, Balan and Chander were partners in a firm sharing profits in the proportion of 1/2, 1/3 and 1/6 respectively. Chander retired on 1st April, 2014. The Balance Sheet of the firm on the date of Chander’s retirement was as follows:
It was agreed that:
(i) Goodwill be valued at ₹ 27,000.
(ii) Depreciation of 10% was to be provided on Machinery.
(iii) Patents were to be reduced by 20%.
(iv) Liability on account of Provident Fund was estimated at ₹ 2,400.
(v) Chander took over Investments for ₹ 15,800.
(vi) Amit and Balan decided to adjust their capitals in proportion of their profit-sharing ratio by opening Current Accounts.
Prepare Revaluation Account and Partners Capital Accounts on Chander’s retirement.

Answers

Answered by kingofself
8

Here no information is given regarding the share acquired by Amit and Balan, therefore, their gaining ratio is same as their new profit sharing ratio i.e. 3 : 2.

Explanation:

Adjustment of Goodwill

Chander's share of Goodwill = 27,000×\frac{1}{4}

Amit will pay = 4,500×\frac{3}{5}

Balan will pay =4,500×\frac{2}{5}

Adjustment of Capital

Adjusted Old Capital of Amit =44,800 (40,000+4,500+300)−2,700=Rs 42,100

Adjusted Old Capital of Balan=39,700 (36,500+3,000+200)−1,800=Rs 37,900

Total Adjusted Capital=42,100+37,900=Rs 80,000

New Profit Sharing Ratio=3:2

Amit's New Capital=80,000×35=Rs 48,000

Balan's New Capital=80,000×25=Rs 32,000

Since, here no information is given regarding the share acquired by Amit and Balan, therefore, their gaining ratio is same as their new profit sharing ratio i.e. 3 : 2.

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