Question

. Johny, Tony and Sony are partners sharing profits and losses in the proportion of 1/2, 1/3rd and th
755pectively. The firm's balance sheet on March 31, 2017 was as follows:
Balance Sheet
₹
Assets
3,000
Liabilities
Sundry creditors
Bills payable
Reserve fund
Capital accounts
Johny
Tony
Sony
22,000
1,000
40,000
30,000
30,000
19,000 Cash at bank
5,000 Debtors
12,000 Less : Provision
Stock
Motor vans
Plant and machinery
1,00,000 Factory building
1,36,000
21,000
24,000
8,000
35,000
45,000
1,36,000
Tony retires on that date subject to the following adjustments :
(a) The goodwill of the firm to be valued at 21,400.
h) Plant and machinery be depreciated by 10% and motor vans by 15%.
c) Stook be appreciated by 20% and buildings by 20%.
d) Provision for doubtful debts to be increased by 2,000.
Prepare Profit and Loss Adjustment Account and Tony's Capital Account
ICBSE​

Answer 1

Answer:

ANSWER

(i) JOURNAL

1. Cash a/c... Dr. 10500

To C's Capital a/c 7500

To Premium for goodwill a/c 3000

(Being capital and premium for goodwill brought in by C)

2. Premium for goodwill a/c... Dr. 3000

To A's Capital a/c 2000

To B's Capital a/c 1000

(Being premium for goodwill distributed among the partners in the ratio of 2:1)

3. Building a/c... Dr. 2500

To Revaluation a/c 2500

(Being increase in asset transferred to revaluation account)

4. Revaluation a/c.... Dr. 1750

To Plant and Machinery a/c 875

To Stock a/c 500

To Provision for doubtful debts a/c 375

(Being decrease in assets and increase in liabilities transferred to revaluation account)

5. Revaluation a/c... Dr. 750

To A's Capital a/c 500

To B's Capital a/c 250

(Being profit on revaluation transferred to the partner's capital accounts)

(ii) REVALUATION A/C

Dr. Cr.

Particulars Amount

(in Rs.) Particulars Amount

(in Rs.)

To Stock a/c 500 By Building a/c 2500

To Plant and Machinery a/c 875

To Provision for doubtful debts a/c 375

To Profit transferred to

- A's Capital a/c

- B's Capital a/c

500

250

TOTAL 2500 TOTAL 2500

(iii) PARTNER'S CAPITAL A/C

Particulars A B C Particulars A B C

By Balance b/d 15000 10000 -

By Cash a/c - - 7500

To Balance c/d 17500 11250 7500 By Premium for goodwill a/c 2000 1000 -

By Revaluation a/c 500 250 -

(iv) BALANCE SHEET

(after admission of C)

Liabilities Amount

(in Rs.) Assets Amount

(in Rs.)

Building (25000+2500) 27500

Capital

- A

- B

- C

17500

11250

7500 Plant and Machinery (17500-875) 16625

Sundry Creditors 32950 Stock (10000-500) 9500

Debtors 4850

-- Provision for Doubtful debts (375) 4475

Cash (600+10500) 11100

TOTAL 69200 TOTAL 69200