X and Y are partners in a firm sharing profits in the ratio of 2:3. The Balance Sheet of the firm on March 31, 2018 was as follows: Liabilities Capitals: Y Creditors Outstanding Expenses 500000800000 4,30,000 1,50,000 30,000 40,000 40,000 10.000 Land Building Plant 80,000 Furniture 20,000 Stock Debtors Cash Assets From April 1, 2018 onwards the partners decided to share profits equally. The following adjustments were agreed upon : ) The goodwill of the firm be valued at 3,20,000 but it was not to appear in books. (it) Land was valued at 6,00,000; Plant 1,80,000; Furniture at ? 25,000. The revised value of assets was to be shown in Balance Sheet. Pass necessary journal entries in the books of the firm,
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Answer:
11th
Accountancy
Financial Statements of Sole Proprietorship
Preparation of Trading, Profit and Loss Account and Balance Sheet
A, B and C are partners...
ACCOUNTANCY
A,B and C are partners sharing profits and losses in the ratio of 3:2:1 respectively. Their Balance Sheet as at 31
st
March,2018 is as follows:
Liabilities (Rs.) Assets (Rs.)
Capital A/cs:
A 60,000
B 60,000
C 40,000
Creditors
Bills Payable
1,60,000
30,000
10,000 Land and Building
Plant and Machinery
Furniture
Stock
Debtors
Bills Receivable
Bank 50,000
40,000
30,000
20,000
30,000
20,000
10,000
2,00,000 2,00,000
D is admitted as a new partners on 1
st
April,2018 for an equal share and is to pay Rs.50,000 as capital. Following are the adjustment required on D
′
s admission:
(a) Out of the Creditors, a sum of Rs.10,000 is due to D which will be transferred to his capital Account.
(b) Advertisement Expenses of Rs.1,200 are to be carried forward to next accounting period as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum of Rs.2,000 paid for B
′
s personal expenses.
(d) A Bill of Exchange of Rs.4,000 which was previously discounted with the banker, was dishonoured on 31
st
March,2018 but no entry has been passed for that.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to Rs.2,100 is paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D
′
s admission.
December 26, 2019
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Tanish Sherab
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ANSWER
(i) REVALUATION A/C
Dr. Cr.
Particulars Amount Particulars Amount
To Provision for Doubtful Debts 1700 By Prepaid advertisement Expenses 1200
To A's Capital
(revenue expense) 2100 By B's Capital
(personal expenses) 2000
By Loss transferred to:
- A's Capital a/c
- B's Capital a/c
- C's Capital a/c
300
200
100
3800 3800
(ii) PARTNER'S CAPITAL A/C
Dr. Cr.
Particulars A B C D Particulars A B C D
To Revaluation a/c
(personal) 2000 By Balance b/d 60000 40000 40000
To Revaluation a/c
(loss) 300 200 100 By Cash a/c 40000
To Balance c/d 61800 37800 39900 50000 By Creditors 10000
By revaluation expenses 2100
62100 40000 40000 50000 62100 40000 40000 50000
(iii) BALANCE SHEET
Dr. Cr.
Liabilities Amount Assets Amount
Capital a/cs:
- A
- B
- C
- D
61800
57800
39900
50000 Land and Building 50000
Bills Payable 10000 Plant and Machinery 40000
Creditors 30000
(-) D's Capital (10000) 20000 Furniture 30000
Stock 20000
Prepaid Advertisement
Expenses 1200
Debtors 30000
(-) Provision for (1700)
Doubtful debts
(+) Bills receivable 4000
dishonoured 32300
Bills receivable 20000
Bank (10000+40000-4000) 46000
239500 239500