Question

Balance Sheet of Ram and Shyam who shares profits in proportion to their capitals as at 31st March, 2018 is:
On 1st April, 2018 they admitted Arjun into partnership on the following terms:
(a) Arjun to bring in ₹ 20,000 as capital and ₹ 6,600 for goodwill, which is to be left in the business and he is to receive 1/4th share of the profits.
(b) Provision for Doubtful Debts is to be 2% on Debtors.
(c) Value of Stock to be written down by 5%.
(d) Freehold Premises are to be taken at valuation of ₹ 22,400; Plant and Machinery ₹ 11,800; Fixtures and Fittings ₹ 1,540 and Vehicles ₹ 800.
You are required to make necessary adjustments entries in the firm, give Balance Sheet of the new firm as at 1st April, 2018 and also give’s the proportions in which the partners will share profits , there being no change in the proportions of Ram and Shyam.

Answer 1

Provision for Doubtful Debts is to be 2% on Debtors.

(c) Value of Stock to be written down by 5%.

(d) Freehold Premises are to be taken at valuation of ₹ 22,400; Plant and Machinery ₹ 11,800; Fixtures and Fittings ₹ 1,540 and Vehicles ₹ 800.

You

HOPE THIS HELPS ❤️

PLEASE MARK AS BRAINLIEST ❤️❤️

Answer 2

The necessary adjustments entries and the Balance Sheet of the new firm are calculated below:

Explanation:

Capital brought in by Ram and Shyam are 30,000 and 25,000 respectively

Profit Sharing Ratio (Ram and Shyam) =6: 5

Arjun admited for1/4 Share of profit

Let the combined share of all partners after Arjun's admission be =1

Combined share of Ram and Shyam after Arjun's admission=1- Arjun's share

$=1-\frac{1}{4}=\frac{3}{4}$

Calculation of New Ratio:

New Ratio - Old Ratio- Combined share of Ram and Shyam

Ram's New Share

$=\frac{6}{11} \times \frac{3}{4}=\frac{18}{44}$

Shyam's New Share

$=\frac{5}{11} \times \frac{3}{4}=\frac{15}{44}$

New Profit sharing Ratio Ram, Shaym and Arjun is

$=\frac{18}{44}: \frac{15}{44}: \frac{1}{4}=\frac{18: 15: 11}{44}=18: 15: 11$

Distribution of Premium for Goodwill

Ram's

$=6,600 \times \frac{6}{11}=3,600$

Shaym's

$=6,600 \times \frac{5}{11}=3,000$

Distribution of Loss on Revaluation

Debit Ram's Capital A/c

$=1,315 \times \frac{6}{11}=717 ( approx.)$

Debit Shyam's Capital A/c

$=1,315 \times \frac{5}{11}=598 ( approx.)$