Question

Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2018 was:
They admitted Leander as a new partner on this date. New profit-sharing ratio is agreed as 3 : 2 : 3. Leander brings in proportionate capital after the following adjustments:
(a) Leander brings ₹ 16,000 as his share fo goodwill.
(b) Provisions for Doubtful Debts is to be reduced by ₹ 2,000.
(c) There is an old Typewriter valued at ₹ 2,400. It does not appear in the books of the firm. It is now to be recorded.
(d) Patents are valueless.
Prepare Revaluation Account, Capital Accounts and opening Balance Sheet of Pradeep, Dhanraj and Leander.

Answer 1

Explanation:

Working Notes:

Working Notes 1:

$Pradeep$ : $Dhanraj$

$OldRatio$  $3 \quad: \quad 1$

$Pradeep : Dhanraj : Leander$

$New Ratio$  $3: 2: 3$

Sacrificing Ratio = Old Ratio - New Ratio

$Pradeep$ = $\frac{3}{4}-\frac{3}{8}=\frac{3}{8}$

$Dhanraj$ = $\frac{1}{4}-\frac{2}{8}=\frac{0}{8}$

Leander Acquires his share of Profit from Pradeep only. Therefore amount of Goodwill brought by Leander will be taken by Pradeep alone

Working Notes 2:

Distribution of Revaluation Profit

$Pradeep's share$ = $3,400 \times \frac{3}{4}=\mathrm{Rs} 2,550$

$Dhanraj's share$ = $16,000 \times \frac{1}{4}=\mathrm{Rs} 4,000$

Working Notes 3:

Distribution of Reserve fund

$Pradeep's share$ = $16,000 \times \frac{3}{4}=\mathrm{Rs} 12,000$

$Dhanraj's share$ = $16,000 \times \frac{1}{4}=\mathrm{Rs} 4,000$

Working Notes 4:

Calculation of Leander's Capital

Combined Capital of Pradeep and Dhanraj after all adjustments $=90,550+24,850=1,15,400$

Combined share of Profit of Pradeep and Dhanraj = 1 - Leander Share

$=1-\frac{3}{8}=\frac{5}{8}$

Total Capital of the firm on the basis of combined Capital of Pradeep and Dhanraj

$=1,15,400 \times \frac{8}{5}=\mathrm{Rs} 1,84,640$

Leander's Capital $=1,84,640 \times \frac{3}{8}=\mathrm{Rs} 69,240$