Question

Balance Sheet of X and Y, who share profits and losses as 5 : 3 , as at 1st April, 2017 is :
On the above date, they decided to change their profit-sharing ratio to 3 : 5 and agreed upon the following:
(a) Goodwill be valued on the basis of two years purchase of the average profit of the last three years.
Profits for 2014-15 : ₹ 7,500; 2015-16 : ₹ 4,000; 2016-17 : ₹ 6,500.
(b) Machinery and Stock be revalued at ₹ 45,000 and ₹ 8,000 respectively.
(c) Claim on account of workmen compensation is ₹ 6,000.
Prepare Revaluation Account Partners Capital Accounts and the Balance Sheeet of the new firm.

Answer 1

HEYA MATE YOUR ANSWER IS

years.

Profits for 2014-15 : ₹ 7,500; 2015-16 : ₹ 4,000; 2016-17 : ₹ 6,500.

(b)

HOPE THIS HELPS ❤️

PLEASE MARK AS BRAINLIEST ❤️❤️

FOLLOW ME

Answer 2

The Revaluation Account, Partners Capital Accounts and the Balance Sheeet of the new firm are calculated and prepared below:

Explanation:

Calculation of Sacrificing (or Gaining) Ratio

Old Ratio $(\mathrm{X} \text { and } \mathrm{Y})=5: 3$

New Ratio $(\mathrm{X} \text { and } \mathrm{Y})=3: 5$

Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio

$X^{\prime} s Share =\frac{5}{8}-\frac{3}{8}=\frac{2}{8}(\text {Sacrifice})$

$Y's Share =\frac{3}{8}-\frac{5}{8}=\frac{-2}{8}(\text { Gain })$

Calculation of Goodwill

Goodwill = Average Profit $\times$ No. of Years Purchase

Average Profit

$=\frac{7,500+4,000+6,500}{3}=Rs.6,000$

Therefore, Goodwill

$=6,000 \times 2=Rs.12,000$

Calculation of Adjustment of Goodwill

Credited to X's Capital

$=12,000 \times \frac{2}{8}=Rs. 3,000$

Debited to Y's Capital

$=12,000 \times \frac{2}{8}=Rs. 3,000$

The Revaluation Account, Partners Capital Accounts and the Balance Sheeet of the new firm are calculated and prepared below: