Question

Badal and Bijli were partners in a firm sharing profits in the ratio of 3 : 2. Their Balance
Sheet as at 31st March, 2019 was as follows :

Balance Sheet of Badal and Bijli as at 31st March, 2019

Liabilities Amount Assets Amount

Capitals :

Badal 1,50,000

Bijli 90,000

Badal’s Current A/c

Investment Fluctuation Reserve

Bills Payable

Creditors

Work’s men Compensation Fund

2,40,000

12,000

24,000

8,000

26,000

30,000

Building

Investments

(book value Rs.45,000)

Stock

Debtors-22,000

-Prov. 2,000

Cash

Bijli’s Current A/c

Goodwill

Profit and Loss A/c

Advertisement Suspense A/c

1,50,000

73,000

25,000

20,000

22,000

2,000

24,000

18.000

6,000

3,40,000 3,40,000

Raina was admitted on the above date as a new partner for1/6th share in the profits of the

firm. The terms of agreement were as follows :

(i) Raina will bring Rs.40,000 as her capital and not bring Rs.12,000 in cash for her share of

goodwill premium.

(ii) Liability for WCF is Rs.24,000.

.(iii) The building was overvalued by Rs.15,000 and stock by Rs.3,000.

(iv) A provision of 10% was to be created on debtors for bad debts.

Prepare the Revaluation Account and Current and Capital Accounts of Badal, Bijli and

Raina.
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Answer 1

Answer:

Explanation:

Answer is there in images

Answer 2

Answer:

The Revaluation account, Current account and Capital accounts of Badal, Bijli and Raina are demonstrated in the attached images.

Explanation:

i) After Raina's admission in the company,

Raina's share = $\frac{1}{6}$

Badal's share = $\frac{5}{6} * \frac{3}{5}$ = $\frac{3}{6}$

Bijli's share = $\frac{5}{6}* \frac{2}{5}$ = $\frac{2}{6}$

New ratio = 3:2:1 (Badal: Bijli: Raina)

ii) Badal's sacrifice = $\frac{3}{5} - \frac{3}{6}$ = $\frac{3}{30}$

Bijli's sacrifice = $\frac{2}{5} - \frac{2}{6} = \frac{2}{30}$

Sacrificing ratio = 3:2 (Badal:Bijli)

iii) The revaluation account, current account and capital account are demonstrated in the attached images.

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