Question

J and R are partners in a firm sharing profits in the ratio of 3:1

Balance Sheet

As at 31-3-2016

Creditors 70000 P & M 176000

Reserve 30000 Inventory 26000

Provident 40000 Debtors 57000

Fund Less: PDD 3000 54000

Capital A/c Bank 68000

J 110000 P/L a/c 16000

R 90000

340000 340000

M was admitted for 1/4th shares

a) P & M was overvalued by R.s 16000. b) PDD was to be reduced by R.s 2000. c) Creditors included R.s 20000 received as commission from M. d) Goodwill of the firm was R.s 60000. M bought his share in cash and

capital of R.s 1,00,000. e) Adjust capital of J and R on the basis of M’s capital and adjust

surplus through current account and deficiency through cash

Prepare necessory accounts and position statement.​

Answer 1

Answer:

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