Double Entry Book Keeping (Section A) -- 15 Son of a Parts 3.104 Nitin and Lokesh are partners in a firm sharing profits and losses in the ratio of 60:40. Their Balance She 14 Apng 2021 w til 31st March, 2021 was as follows: BALANCE SHEET as at 31st March, 2021 ₹ Assets Liabilities 1903 1,50,000 1,25,000 Capital A/cs: Nitin Lokesh General Reserve Sundry Creditors 1000, Plant Patents Stock Debtors Cash at Bank Resene 2,75,000 50,000 75,000 4,00,000 workmen Compensa 400331 Creditars Outstanding Expen Pratik is admitted as partner wef 1st April, 2021 on the following terms: (1) He will pay 50,000 as Goodwill for 1/4th share in the profits of the firm. (ii) The assets are to be valued as follows: Plant at 1,60,000; Stock at 90,000; Debtors at book value less provision of 5% for Doubtful Debt Rohit is ad adjusted in for Goods contribut liability to (iii) Creditors included an amount of 7,000 which was not to be paid. Also, there was a compensation to workers amounting to 10,000. (iv) Pratik introduced * 1,00,000 as Capital and the capitals of other partners were to be adjusted in the Following deprecia ty Prepare new profit-sharing ratio. For this purpose, Current Accounts were to be opened. Give Journal entries to record the above and Balance Sheet after Pratik's admission.
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Explanation:
Items (Points) Provision in the Absence of Partnership Deed
(a) Salaries of Partners No Salary will be allowed to Partners.
(b) Interest on Partners’ Capitals No interest will be allowed to Partners on Capital
(c) Interest on Partners’ Loan 6% p.a. Interest will be allowed on the amount given by
partners in the form of Loans and Advances to firm.
(d) Division of Profit Profits will be shared equally, it is irrespective the
amount of capital contributed by partners
(e) Interest on Partners’ Drawings No Interest will be charged on the Drawings of Partners
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