Kumar&co, Is a partnership firm with Sourav and Gaurav as partners. Sourav enjoys 5/8th share of profits while Gaurav enjoys 3/8th share of profits. The balance sheet of the firm as on 31/03/18 stood as follows.
The firm on 31/3/19 enjoyed a net profit of Rs.25,00,000.The partnership deed provides with connection of business that
1. Interest on capital is to be allowed @8%p.a
2. Interest on drawing is to be charged @12%p.a
3. Sourav works hard and has to be allowed a salary of Rs.8000 p.m. to which Gaurav agrees. Drawings of Sourav and Gaurav were 2,00,000 and 3,00,0000 respectively.
Besides these, on 31/03/19,a new partner kohli joined in the firm. His share was decided as 2/10th of the total profits to which the capital he must bring. For the purposes of goodwill, The value of goodwill may be valued by taking into the consideration of the preceding 4 yrs net profits (including current year) for 5 years purchase. The profits of preceding years is as follows.
• On 31/3/18—20,00,000 (Includes profit on sale of investments,Rs.80000)
• On 31/3/17---loss of Rs.15,00,000 (Includes compensation paid,Rs.20,00,000)
• On31/3/16---12,00,000. (Includes no abnormal item)
For the purposes of admission ,all the liabilities and assets are revalued where it found that
1. Machinery is depriciated by 10%
2. An unrecorded asset car is found which bought on 31/3/15. Was forgotten to depreciated in which the current value that car is Rs.18,00,000.
3. There is a chance of getting 2% of debtors bad to which provision was necessary.
4. The land was Appreciated by 15%. And all other assets were not changed.
You are required to prepare the profit and loss appropriation account and revaluation account and partners capital account and adjustment for goodwill and the also the new balance sheet of reconstituted firm.
Answers
Answer:
Kumar&co, Is a partnership firm with Sourav and Gaurav as partners. Sourav enjoys 5/8th share of profits while Gaurav enjoys 3/8th share of profits. The balance sheet of the firm as on 31/03/18 stood as follows.
The firm on 31/3/19 enjoyed a net profit of Rs.25,00,000.The partnership deed provides with connection of business that
1. Interest on capital is to be allowed @8%p.a
2. Interest on drawing is to be charged @12%p.a
3. Sourav works hard and has to be allowed a salary of Rs.8000 p.m. to which Gaurav agrees. Drawings of Sourav and Gaurav were 2,00,000 and 3,00,0000 respectively.
Besides these, on 31/03/19,a new partner kohli joined in the firm. His share was decided as 2/10th of the total profits to which the capital he must bring. For the purposes of goodwill, The value of goodwill may be valued by taking into the consideration of the preceding 4 yrs net profits (including current year) for 5 years purchase. The profits of preceding years is as follows.
• On 31/3/18—20,00,000 (Includes profit on sale of investments,Rs.80000)
• On 31/3/17---loss of Rs.15,00,000 (Includes compensation paid,Rs.20,00,000)
• On31/3/16---12,00,000. (Includes no abnormal item)
For the purposes of admission ,all the liabilities and assets are revalued where it found that
1. Machinery is depriciated by 10%
2. An unrecorded asset car is found which bought on 31/3/15. Was forgotten to depreciated in which the current value that car is Rs.18,00,000.
3. There is a chance of getting 2% of debtors bad to which provision was necessary.
4. The land was Appreciated by 15%. And all other assets were not changed.
You are required to prepare the profit and loss appropriation account and revaluation account and partners capital account and adjustment for goodwill and the also the new balance sheet of reconstituted firm.
Explanation: