Question

Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31.12.2016. A and B share profits and losses in the ratio of 2:1. Balance Sheet of A and B as on December 31, 2016 Liabilites Amount (Rs) Assets Amount (Rs) Bills Payable 10,000 Cash in Hand 10,000 Creditors 58,000 Cash at Bank 40,000 Outstanding 2,000 Sundry Debtors 60,000 Expenses Stock 40,000 Capitals: Plant 1,00,000 A 1,80,000 Buildings 1,50,000 B 1,50,000 3,30,000 4,00,000 4,00,000 C is admitted as a partner on the date of the balance sheet on the following terms: (i) C will bring in Rs 1,00,000 as his capital and Rs 60,000 as his share of goodwill for 1/4 share in the profits. (ii) Plant is to be appreciated to Rs 1,20,000 and the value of buildings is to be appreciated by 10%. (iii) Stock is found over valued by Rs 4,000. (iv) A provision for bad and doubtful debts is to be created at 5% of debtors. (v) Creditors were unrecorded to the extent of Rs 1,000. Pass the necessary journal entries, prepare the revaluation account and partners’ capital accounts, and show the Balance Sheet after the admission of C.

Answer 1

tion:

casha\c                           dr

   to cs capital a\c

    to premium for goodwill a\c

planta\c                                dr

      to revaluation a/c