Question

Q. 65. Gautam and Rahul are partners in a firm, sharing profits and losses in the
ratio of 2 : 3. Their Balance Sheet as at 31st March, 2020, was as follows:
BALANCE SHEET
as at 31st March, 2020
Liabilities
Assets
Sundry Creditors
5.000 Goodwill
Bills Payable
15,000 Furniture
25,000
General Reserve
10,000 Stock
15,000
Capital A/cs:
Sundry Debtors
12,000
Gautam
30,000
Less : Provision for
Rahul
40,000 70,000
Doubtful Debts 2,000 10,000
Cash in hand
40,000
1,00,000
1,00,000
Karim was to be taken as a partner with effect from 1st April, 2020, on the
following terms:
(a) The new profit sharing ratio of Gautam, Rahul and Karim would be 5: 3:2.
(b) Provision for Doubtful Debts would be raised to 20% of debtors.
(c) Karim would bring in cash, his share of capital of 40,000 and his share of
goodwill valued at 10,000.
(d) Gautam would take over the furniture at *22,000.
You are required to :
(i) Pass journal entries at the time of Karim's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm.
Plz give explained answer ​

Answer 1

Journal Entries and Balance Sheet

Explanation:

Pls refer to the pic attached