the balance sheet of madhu and vidhi who share profit in the ratio 2:3 at 31 March,2016 is given below.
liability
madhu capital 520000
vidhi capital 300000
general reserve 30000 bills payable 150000
land and building 300000
machinery 280000
stock 80000
debtors 300000
less provision 10000 =290000
bank 10000
madhu and vidhi decided to admit
Answers
Explanation:
(i) REVALUATION A/C
Dr. Cr.
Particulars Amount Particulars Amount
To Provision for
Doubtful Debts a/c 5000 By Land and Building a/c 26000
To Workmen Compensation a/c 6000
To Profit transferred to:
- Madhu's Capital a/c
- Vidhi's Capital a/c
6000
9000
26000 26000
(ii) PARTNER'S CAPITAL A/C
Dr. Cr.
Particulars Madhu Vidhi Gayatri Particulars Madhu Vidhi Gayatri
By Balance b/d 520000 300000
By General Reserve a/c 12000 18000
By Cash a/c 400000
By Premium for
Goodwill a/c 60000 90000
To Balance b/d 598000 417000 400000 By Revaluation a/c 6000 9000
598000 417000 400000
(iii) BALANCE SHEET
Liabilities Amount Assets Amount
Capital a/cs:
- Madhu
- Vidhi
- Gayatri
598000
417000
400000 Land and Building 326000
Bills Payable 150000 Machinery 280000
Workmen Compensation
Reserve 6000 Stock 80000
Debtors 300000
(-) Provision (15000)
for doubtful debts 285000
Bank (50000+400000+150000) 600000
1571000 1571000
Working Note:
Calculation of sacrificing ratio:
Madhu's sacrifice= 2/5-2/10
= 2/10
Vidhi's sacrifice= 3/5-3/10
= 3/10
Sacrificing ratio= 2:3