Question

Following is the Balance Sheet of A and B, who shared Profits and Losses in the ratio of 2 : 1 , as at 1st April, 2018:
On the above date , the partners changed their profit-sharing ratio to 3 : 2 . For this purpose, the goodwill of the firm was valued at ₹ 3,00,000 . The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5,00,000;
(b) Reserve is to be maintained at ₹ 3,00,000.
(c) The total capital of the partners in the new firm will be ₹ 6,00,000, which will be shared by the partners in their new profit-sharing ratio.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.

Answer 1

❇️MARK AS BRAINLIST PLZ ❇️

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❇️Revaluation A/c❇️

➡️Particulars Amt. Particulars Amt.

To Partner's Capital A/c: 210000 By Land and Bldg A/c 210000

A -140000

B- 70000

210000 210000

➡️Partner's Capital A/c

➡️Particulars A B Particulars A B

➡️To Reserve A/c 180000 120000 By bal b/d 300000 200000

➡️To A's Capital A/c 20000 By Revaluation A/c 140000 70000

➡️To Cash A/c 20000 By Reserve A/c 100000 50000✴️

➡️To Bal c/d 360000 240000 By B's Capital A/c (goodwill) 20000 ❇️

➡️By Cash A/c 60000

➡️560000 380000 560000 380000❇️

Balance Sheet

Liabilities Amount Assets Amount

Capital A/cs:

A - 360000

B - 240000

600000 Land and Building 500000

Reserves 300000 Furiniture 80000

Creditors 200000 Stock 240000

Debtor 150000

Cash 70000

Bank 60000

1100000 1100000

Workings:

A's sacrificing ratio: 3/5 - 2/3 = (1/15)

Answer 2

A's Sacrifice =20,000

B's Sacrifice  =20,000

Explanation:

Calculation of new Capital

A = 6,00,000×$\frac{3}{5}$ = 3,60,000

B = 6,00,000×$\frac{2}{5}$ = 2,40,000

Calculation of Gaining /Sacrificing Ratio and Adjustment of Goodwill

Old ratio =2:1

New ratio = 3:2

Sacrificing ratio =Old ratio-New ratio

Sacrificing ratio of A = $\frac{2}{3}$ - $\frac{3}{5}$ =$\frac{1}{15}$

Sacrificing ratio of B = $\frac{1}{3}$ - $\frac{2}{5}$ =$\frac{1}{15}$

A's Sacrifice = 3,00,000×$\frac{1}{15}$ =20,000

B's Sacrifice = 3,00,000×$\frac{1}{15}$ =20,000