Ramesh and Sathish are partners in a
firm, sharing profits and losses in the
ratio of 3:2. Their balance sheet as on
31.03.2019 stood as follows.
Balance sheet as on 31.03.2019
Liabilities Rs Assets Rs
Creditors 41,500 Cash at Bank 22,500
General
Bills receivable 3,000
Reserves 4,000 Debtors 18,000
Capital
Less: PDD
accounts
1,000 17,000
Ramesh 30,000 Stock
20,000
Sathish 16,000 46,000 Building 25,000
Machinery
4,000
On 01.04.2019 they admitted Shyam as
new partner and offered him 1/5th share
in future profits on the following terms.
a. He has to bring in Rs 10,000 as his
capital and Rs 5,000 towards
goodwill.
Appreciate building by 20%
C. Maintain 5% PDD on debtors
d. Provide for outstanding repair bill
Rs 1,000.
Prepare :
Revaluation
Partners capital Accounts
New balance sheet of the new firm.
Answers
Answer:
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
Explanation:
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