gopal and govind are partners sharing profits and losses in the ratio of 60:40. the firm's balance sheet as on 31.3.15 was as follows: liabilities capital accounts : gopal govind long-term loan current liabilities 1,20,000 80,000 2,50,000 6,50,000 fixed assets investments assets current assets loans and advances 50,000 6,50,000 due to financial difficulties, they have decided to admit guru as a partner in the firm from 1.4.2015 on the following terms: guru will be entitled to 40% of the profits. guru will bring in cash 1,00,000 as capital. it is agreed that goodwill of the firm will be valued at 2 years' purchase of 3 years' normal average profits of the firm and guru will bring in cash his share of goodwill. it was also decided that the partners will not withdraw their share of goodwill nor will the goodwill appear in the books of account. the profits of the previous three years were as follows: for the year ended 31.3.2013 profit ? 20,000 (including insurance claim received 40,000). for the year ended 31.3.2014 loss ? 80,000 (including voluntary retirement compensation paid 1,10,000). for the year ended 31.3.2015 profit 1,05,000 (including a profit it was decided to revalue the assets on 31.3.2015 as follows: fixed assets (net) investments current assets loans and advances 74,00,000 nil 1,80,000 the new profit-sharing ratio after the admission of guru was of 25,000 on the sale of assets). 35: 25: 40. pass journal entries on admission, show goodwill calculation and prepare revaluation account, partners' capital accounts, and balance sheet as on 1.4.2015 after the admission of guru.
Also give working notes.
Answers
Answer:
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Jai Shree Ram
Answer:
Explanation:
Journal Entries
Date Particulars LF Debit Amount (in Rs) Credit Amount (in Rs)
31 Mar 2015 Cash A/c Dr 124,000
To Guru's Capital A/c 100,000
To Premium for Goodwill A/c 24,000
(Goodwill & Capital brought in by new partner)
Premium for Goodwill A/c Dr 24,000
To Gopal's Capital A/c 15,000
To Govind's Capital A/c 9,000
(Premium for goodwill distributed among sacrificing partners in sacrificing ratio)
Fixed Assets A/c Dr 100,000
To Revaluation A/c 100,000
(Fixed Assets revalued)
Revaluation A/c Dr 70,000
To Current Assets A/c 20,000
To Investments A/c 50,000
(Current Assets & Investments Revalued)
Revaluation A/c
Date Particulars Amount (in Rs) Date Particulars Amount (in Rs)
Current Assets A/c 20,000 Fixed Assets A/c 100,000
Investments A/c 50,000
Revaluation profit transferred to
Gopal's Capital A/c 18,000
Govind's Capital A/c 12,000
100,000 100,000