Question

following is the balance sheet of x and y as on 31.03.19, z is admitted as a partner on that date when the position of the x and y was: Liabilities: x's capital ₹190000, y's capital ₹180000, creditors ₹42000, general reserve ₹56000, workmen compensation reserve ₹32000 and Assets: cash in hand ₹16000, debtors ₹24000, stock, building and machinery are ₹82000, ₹198000 and ₹180000 respectively. X and Y share profits and losses in the ratio 3:2. the following terms of admission are agreed upon: a) Revaluation of assets: building ₹225000, machinery ₹175000 and stock ₹75000 b)The liability on workmen compensation reserve is determined at ₹40000 c)Z brought in as his share of goodwill ₹60000 in cash d)Z was to bring in further cash as would make his capital equal to 20% of the combined capital of x and y after above revaluation and adjustments are carried out. e)The future profit sharing ratio is 2:2:1. Prepare new balance sheet of the firm and partner's capital accounts.

Answer 1

Answer:

        X : Y

Old Ratio   3 : 2

                  X : Y : Z

New Ratio 2 : 2 : 1

Sacrificing Ratio = Old Ratio - New Ratio

Only X is sacrificing 1/5 portion of Profit in favour of Z. Therefore amount of Premium for Goodwill will be taken by X only.

Writing Notes 3:

Calculation of Z's Capital

Combined capital of X and Y after all adjustments

Z's Capital = 60000 x 20/100 = ₹ 12000