Question

Hari ,Kunal ,and uma are partners in a firm sharing profits and losses in the ratio 5:3:2.from 1st April ,2018 they decided to share future profit and losses in the ratio of 2 is to 5 is to 3 their balance sheet showed a balance of 75000 in the profit and loss account and a balance of rupees 15000 in investment fluctuation fund for this purpose it was agreed that number 1 Goodwill of the firm was valued at 300000 number to that investment having a book value of 50,000 were valued at 35000 number 3 that stock having a book value of 50000 be depreciated by 10% pass the necessary journal entries for the above in the books of the form

Answer 1

Answer:

(i) REVALUATION ACCOUNT

Dr. Cr.

Particulars Amount Particulars Amount

To Employee provident fund a/c 5000 By Provision for Doubtful Debts /ac 600

To Fixed Assets a/c 10000 By Loss transferred to:

- X's Capital a/c

- Y's Capital a/c

11500

6900

To Stock a/c 3000

To Creditors a/c 1000

19000 19000

(ii) PARTNER'S CAPITAL A/C

Dr. Cr.

Particulars X Y Z Particulars X Y Z

To Revaluation a/c 11500 6900 By Balance b/d 70000 31000

To Profit and loss a/c 1500 900 By Cash a/c 20000

To Balance c/d 72625 25375 20000 By Workmen Compensation Fund a/c 3625 2175

By Premium for Goodwill a/c 12000

85625 33175 20000 85625 33175 20000

(iii) BALANCE SHEET

Liabilities Amount Assets Amount

Capital a/cs:

- X

- Y

- Z

72625

25375

20000 Cash at Bank(5000+20000+12000) 37000

Creditors 16000 Debtors

20000

Provident Fund

15000 Fixed Assets 70000

Stock (25000-3000) 22000

149000 149000

Working Note:

Calculation of New profit sharing ratio:

Old ratio= 5:3

Z is admitted for 1/8th share

Z acquired entire share from X.

X's new share= 5/8-1/8

= 4/8

New profit sharing ratio= 4:3:1