Question

Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. Their Balance Sheet at 31st March, 2018 stood as:
Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit-sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for goodwill. So it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation s are made:
(a) Stock to depreciate by 5% ;
(b) Provision for Doubtful Debts is to be ₹ 500;
(c) Furniture to depreciate by 10% ;
(d) Building is valued at ₹ 40,000.
Show necessary Ledger Accounts and Balance Sheet of new firm.

Answer 1

The necessary Ledger Accounts and Balance Sheet of new firm are calculated below:

Explanation:

Calculation of Sacrificing Ratio

Old Ratio (Rajesh and Ravi) =3: 2

New Ratio (Rajesh, Ravi and Raman) =5: 3: 2

Sacrifidng Ratio = Old Ratio-New Raio

Rajesh's Sacrificing Ratio

$=\frac{3}{5}-\frac{5}{10}=\frac{6-5}{10}=\frac{1}{10}$

Ravi's Sacrificing Ratio

$=\frac{2}{5}-\frac{3}{10}=\frac{4-3}{10}=\frac{1}{10}$

Sacrificing Ratio of Rajesh and Ravi

$=\frac{1}{10}: \frac{1}{10}=1: 1$

Calculation of Goodwill

Actual Capital of all Partners before adjustment of goodwill

= Rajesh Capital + Ravi's Capital + Raman Capital

$=31,190+16,460+16,000$

$=\mathrm{Rs} .63,650$

Capitalised Value on the basis of Raman's share

$=16,000 \times \frac{10}{2}=80,000$

Goodwill of the firm = Capitalised value of the firm - actual capital of all partners before adjustment of goodwill

$=80,000-63,650$

$=16,350$

Raman's Share of Goodwill

$=16,350 \times \frac{2}{10}=3,270$

Adjusment of Raman's share of goodwill

Rajesh's Capital A/c will be credited

$=3,270 \times \frac{1}{2}=1,635$

Ravi's Capital A/c will be credited

$=3,270 \times \frac{1}{2}=1,635$

Distribution of profit on Revaluation (Old Ratio)

Rajesh's profit on Revaluation

$=3,650 \times \frac{3}{5}=2,190$

Ravi's profit on Revaluation

$=3,650 \times \frac{2}{5}=1,460$

Answer 2

Answer:

Revaluation:- 3650

rajesh- 2190

ravi- 1460

partners capital account:-

rajesh- 32825

ravi- 18095

raman 16000

balance sheet:- 109420