Page No 5.93:
Question 61:
Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:
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BALANCE SHEET as at 31st March, 2019 |
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|
Liabilities |
` |
Assets |
` |
|
|
Reserve |
1,00,000 |
Cash |
2,00,000 |
|
|
J's
Capital |
1,50,000 |
|
Other
Assets |
1,50,000 |
|
K's Capital |
1,00,000 |
2,50,000 |
|
|
|
|
3,50,000 |
|
3,50,000 |
|
|
|
|
|
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|
M joins the firm from 1st April, 2019 for a half share in the future
profits. He is to pay ` 1,00,000 for goodwill
and ` 3,00,000 for capital. Draft the Journal entries and prepare
Balance Sheet in each of the following cases:
(a) If M acquires his share of profit from the firm in the
profit-sharing ratios of the partners.
(b) If M acquires his share of profits from the firm in equal
proportions from the original partners.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future
profit-sharing ratio of the partners in each case.
Answer:
(a) If M acquires his share of
profit from the firm in the original ratios of the partners.
|
Journal |
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|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
2019 |
|
|
|
|
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought capital and his of goodwill in cash) |
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|
|
|
|
|
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|
|
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|
Apr.1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Premium for Goodwill distributed
between |
|
|
|
|
|
|
|
|
|
|
|
|
Apr.1 |
Reserve A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Reserve distribution between M and J in their old ratio) |
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Partners’ Capital Accounts |
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|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
60,000 |
40,000 |
|
|
Balance c/d |
2,70,000 |
1,80,000 |
3,00,000 |
Reserve |
60,000 |
40,000 |
|
|
|
2,70,000 |
1,80,000 |
3,00,000 |
|
2,70,000 |
1,80,000 |
3,00,000 |
|
|
|
|
|
|
|
|
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|
Balance Sheet as on April 01, 2019 after M’s admission |
|||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
|
|
|
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
J’s Capital |
2,70,000 |
Other Assets |
1,50,000 |
|
K’s Capital |
1,80,000 |
|
|
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of Future (New) Profit Sharing Ratio
|
|
M |
J |
|
OLD RATION |
3 : |
2 : |
M is admitted for ½ share of profit
Let the combined share of all partners after admission of M be = 1
Combined share of J and K after M’s admission = 1 − M’s share
=1-1/2
=1/2
New
ratio= old ratio –Combined share of B and C
J=
3/5×1/2=3/10
k=2/5×1/2=2/10
|
|
J |
|
K |
|
M |
|
New profit sharing ratio= |
3/10 |
: |
2/10 |
: |
1/2 |
|
= |
3/10 |
: |
2/10 |
: |
5/10 |
|
= |
3 |
: |
2 |
: |
5 |
Working Notes-
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
(b) If M acquires his share of profit from the firm in equal
proportions from the original partners.
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
2019 |
|
|
|
|
|
|
April 1 |
Reserve A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Reserve distributed between J and K in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
4,00,000 |
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To J’s Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought capital and his share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
50,000 |
|
|
|
To K’s Capital A/c |
|
|
50,000 |
|
|
|
(Premium for Goodwill distributed between J and K in sacrificing Raito i.e 1:1) |
|
|
|
|
|
|
|
|
|
|
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|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
50,000 |
50,000 |
|
|
Balance c/d |
2,60,000 |
1,90,000 |
3,00,000 |
Reserve |
60,000 |
40,000 |
|
|
|
2,60,000 |
1,90,000 |
3,00,000 |
|
2,60,000 |
1,90,000 |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after M’s admission |
|||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
|
J’s Capital |
2,60,000 |
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
K’s Capital |
1,90,000 |
Others Assets |
1,50,000 |
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of future (new) profit sharing ratio
|
|
J |
K |
|
Old ratio |
3 : |
2 |
M is admitted for ½ share of profit
J and K each will sacrifice in favour of M=1/2×1/2=1/4
New
ratio= old ratio – Sacrificing Ratio
|
J’s |
=3/5-1/4 |
|
|||||
|
|
=7/20 |
|
|||||
|
k’s |
=2/5-1/4 |
|
|||||
|
|
=3/20 |
|
|||||
|
|
J |
|
K |
|
M |
|||
|
New profit sharing ratio= |
7/20 |
: |
3/20 |
: |
1/2 |
|||
|
= |
7/20 |
: |
3/20 |
: |
10/20 |
|||
|
= |
7 |
: |
3 |
: |
10 |
|||
|
|
J |
|
K |
|
|
Sacrificing ratio= |
1/4 |
: |
1/4 |
=1:1 |
Working Notes:
WN1
Distribution of Premium for Goodwill (in Sacrificing ratio)
J and K each will get =1,00,000×1/2=50,000
WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
(c) If M acquires his share of profit in the ratio of 3:1 from
the orsiginal partner
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
2019 |
|
|
|
|
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
(Reserve distributed between J and K at the time of M’s admission) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
4,00,000 |
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought Capital his share of Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
75,000 |
|
|
|
To K’s Capital A/c |
|
|
25,000 |
|
|
|
(Premium for Goodwill distributed
between |
|
|
|
|
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
75,000 |
25,000 |
|
|
|
|
|
|
Reserve |
60,000 |
40,000 |
|
|
Balance c/d |
2,85,000 |
1,65,000 |
3,00,000 |
|
|
|
|
|
|
2,85,000 |
1,65,000 |
3,00,000 |
|
2,85,000 |
1,65,000 |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after M’s admission |
|||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
|
J’s Capital |
2,85,000 |
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
K’s Capital |
1,65,000 |
Other Assets |
1,50,000 |
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of Future (New) Profit Sharing Ratio
|
|
J |
K |
|
Old ratio |
3 : |
2 |
M is
admitted for ½ share of profit
|
J’s sacrificing rato |
=1/2×3/4 |
|
|
=2/8 |
|
K’s sacrificing rato |
=1/2×1/4 |
|
|
=1/8 |
New
Ratio = Old Ratio − Sacrificing Ratio
|
J’s |
=3/5-3/8 |
|
|||||
|
|
=9/40 |
|
|||||
|
K’s |
=2/5-1//8 |
|
|||||
|
|
=11/40 |
|
|||||
|
|
J |
|
K |
|
M |
||
|
New profit sharing ratio= |
9/40 |
: |
11/40 |
: |
1/2 |
||
|
= |
9/40 |
: |
11/40 |
: |
20/40 |
||
|
= |
9 |
: |
11 |
: |
20 |
||
Working
Notes:
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
J will get =1,00,000×3/4=75,000
K will get =1,00,000×1/4=25,000
WN2
Distribution of Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
Page No 5.94:
Question 62:
The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:
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|
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|
Liabilities |
` |
Assets |
` |
||
|
Madhu's Capital |
5,20,000 |
Land
and Building |
3,00,000 |
||
|
Vidhi's Capital |
3,00,000 |
Machinery |
2,80,000 |
||
|
General
Reserve |
30,000 |
Stock |
80,000 |
||
|
Bills
Payable |
1,50,000 |
Debtors |
3,00,000 |
|
|
|
|
|
|
Less: Provision |
10,000 |
2,90,000 |
|
|
|
|
|
|
|
|
|
|
|
Bank |
50,000 |
|
|
|
|
|
|
||
|
|
|
|
|
||
|
|
10,00,000 |
|
10,00 ,000 |
||
|
|
|
|
|
||
Madhu and Vidhi decided to
admit Gayatri as a new partner from 1st April, 2016
and their new profit-sharing ratio will be 2 : 3 : 5. Gayatri brought
` 4,00,000 as
her capital and her share of goodwill premium in cash.
(a) Goodwill of the firm was valued at
` 3,00,000.
(b) Land and Building was found undervalued by ` 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the
debtors.
(d) There was a claim of ` 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the reconstituted firm.
Answer:
|
Revaluation Account |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
Amount ` |
Particulars |
Amount ` |
||||
|
Provision for Doubtful Debts |
5,000 |
Land &Building |
26,000 |
||||
|
Claim against Workmen Compensation |
6,000 |
|
|
||||
|
Revaluation Profit |
|
|
|
||||
|
|
Madhu’s Capital |
6,000 |
|
|
|
||
|
|
Vidhi’s Capital |
9,000 |
15,000 |
|
|
||
|
|
26,000 |
|
26,000 |
||||
|
|
|
|
|
||||
|
Partners’ Capital
Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Particulars |
Madhu |
Vidhi |
Gayatri |
Particulars |
Madhu |
Vidhi |
Gayatri |
|
|
Balance
c/d |
5,98,000 |
4,17,000 |
4,00,000 |
Balance
b/d |
5,20,000 |
3,00,000 |
|
|
|
|
|
|
|
Bank |
|
|
4,00,000 |
|
|
|
|
|
|
General
Reserve |
12,000 |
18,000 |
|
|
|
|
|
|
|
Premium
for Goodwill |
60,000 |
90,000 |
|
|
|
|
|
|
|
Revaluation |
6,000 |
9,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,98,000 |
4,17,000 |
4,00,000 |
|
5,98,000 |
4,17,000 |
4,00,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2016 |
|||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Bills Payable |
1,50,000 |
Bank (50,000 + 4,00,000 + 1,50,000) |
|
6,00,000 |
|
|
Claim for Workmen Compensation |
6,000 |
Sundry Debtors |
3,00,000 |
|
|
|
Capital: |
|
Less: Provision for Doubtful
Debt |
15,000 |
2,85,000 |
|
|
Madhu |
5,98,000 |
|
Stock |
80,000 |
|
|
Vidhi |
4,17,000 |
|
Machinery |
2,80,000 |
|
|
Gayatri |
4,00,000 |
14,15,000 |
Land &Building |
3,26,000 |
|
|
|
15,71,000 |
|
15,71,000 |
||
|
|
|
|
|
||
Working Notes:
WN1: Calculation of Gayatri’s Share of Goodwill
Gayatri's share=3,00,000×510=1,50,000 to be shared in 2:3
WN1: Calculation of
Sacrificing Ratio
Sacrificing Ratio = Old Ratio – New Ratio
Madhu=25−210=210
Vidhi=35−310=−310
Page No 5.94:
Question 63:
Shyamlal and Sanjay were in partnership business sharing profits and losses in the ratio of 2 : 3 respectively. Their Balance Sheet as at 31st March, 2019 was:
|
|
||||
|
Liabilities |
` |
Assets |
` |
|
|
Sundry
Creditors |
12,435 |
Cash
in Hand |
710 |
|
|
Capital
A/cs: |
|
Cash
at Bank |
11,925 |
|
|
Shyamlal |
34,050 |
|
Sundry
Debtors |
5,500 |
|
Sanjay |
34,050 |
68,100 |
Stock |
18,000 |
|
|
|
|
Furniture |
4,400 |
|
|
|
|
Building |
40,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,535 |
|
80,535 |
|
|
|
|
|
|
On 1st April, 2019, they admitted Shanker into
partnership for 1/3rd share in future profits on the following terms:
(a) Shanker is to bring in ` 30,000 as his capital and
` 20,000 as goodwill which is
to remain in the business.
(b) Stock and Furniture are to be reduced in value by 10%.
(c) Building is to be appreciated by ` 15,000.
(d) Provision of 5% is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued Income of ` 2,400 to be provided for. A debtor, whose dues of ` 4,800 were written off as bad debts, paid 50% in full
settlement.
(f) Outstanding Rent amounted to ` 4,800.
Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts
of Partners and opening Balance Sheet of the new firm.
Answer:
|
Profit and Loss Adjustment Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|
|
Stock |
1,800 |
Building |
15,000 |
|
|
Furniture |
440 |
Accrued Income |
2,400 |
|
|
Provision for Doubtful Debts |
275 |
Bad Debts Recovered |
2,400 |
|
|
Outstanding
Rent |
4,800 |
|
|
|
|
Profit transferred to |
|
|
|
|
|
Shyamlal Capital |
4,994 |
|
||
|
Sanjay Capital |
7,491 |
12,485 |
||
|
|
|
19,800 |
|
19,800 |
|
|
|
|
|
|
|
Partners’ Capital Account |
|||||||
|
Dr. |
|
|
Cr. |
||||
|
Particulars |
Shyamlal |
Sanjay |
Shanker |
Particulars |
Shyamlal |
Sanjay |
Shanker |
|
|
|
|
|
Balance b/d |
34,050 |
34,050 |
|
|
|
|
|
|
Cash A/c |
|
|
30,000 |
|
|
|
|
|
Premiumf
or |
8,000 |
12,000 |
|
|
Balance c/d |
47,044 |
53,541 |
30,000 |
Revaluation |
4,994 |
7,491 |
|
|
|
47,044 |
53,541 |
30,000 |
|
47,044 |
53,541 |
30,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after Shanker’s admission |
|||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Sundry Creditors |
12,435 |
Cash in Hand (710 + 50,000 + 2,400) |
53,110 |
||
|
Capital A/cs: |
|
Cash at Bank |
11,925 |
||
|
Shyamlal |
47,044 |
|
Sundry Debtors |
5,500 |
|
|
Sanjay |
53,541 |
|
Less: Provision for D. Debts |
275 |
5,225 |
|
Shanker |
30,000 |
1,30,585 |
Stock (18,000 – 1,800) |
16,200 |
|
|
Outstanding Rent |
4,800 |
Building (40,000 + 15,000) |
55,000 |
||
|
|
|
Furniture
(4,400 – 440) |
3,960 |
||
|
|
|
Accrued Income |
2,400 |
||
|
|
1,47,820 |
|
1,47,820 |
||
|
|
|
|
|
||
Working Notes:
|
|
Shyamlal |
|
Sanjay |
|
Sacrificing ratio = |
2 |
: |
3 |
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
Shyamlal will get=20,000×25= ` 8,000
Sanjay will get=20,000×35= ` 12,000
WN2
Distribution of Profit from Profit and Loss Adjustment Account (in old
ratio)
Shyamlal will get
=12,485×2/5=4,995
Sanjay will get =12,485×3/5=7,491
Page No 5.95:
Question 64:
A, B and C are
partners sharing profits and losses in the ratio of 3 :
2 : 1 respectively. Their Balance Sheet as at 31st March, 2019 is as follows:
|
Liabilities |
` |
Assets |
` |
|
|
Capital
A/cs: |
|
Land
and Building |
50,000 |
|
|
A |
60,000 |
|
Plant
and Machinery |
40,000 |
|
B |
60,000 |
|
Furniture |
30,000 |
|
C |
40,000 |
1,60,000 |
Stock |
20,000 |
|
Creditors |
|
30,000 |
Debtors |
30,000 |
|
Bills
Payable |
|
10,000 |
Bills
Receivable |
20,000 |
|
|
|
|
Bank |
10,000 |
|
|
|
|
|
|
|
|
|
2,00,000 |
|
2,00,000 |
|
|
|
|
|
|
D is admitted as a partner on 1st April, 2019 for equal share.
His capital is to be ` 50,000.
Following adjustments are agreed on D's admission:
(a) Out of the Creditors, a sum of
` 10,000 is due to D,
it will be adjusted against his capital.
(b) Advertisement Expenses of ` 1,200 are to be carried forward as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum
of ` 2,000 paid for B's personal expenses.
(d) A Bill of Exchange of ` 4,000, which was previously discounted with the bank, was dishonoured on 31st March, 2019 but entry was not passed
for dishonour.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to
` 2,100 is
paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D's
admission.
Answer:
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|
|
Provision for doubtful Debts |
1,700 |
Prepaid Advt. Expense |
1,200 |
|
|
A’s Capital (Rev. Exp.) |
2,100 |
B’s Capital (Personal Exp.) |
2,000 |
|
|
|
|
|
|
|
|
|
|
Loss transferred to |
|
|
|
|
|
A Capital |
300 |
|
|
|
|
B Capital |
200 |
|
|
|
|
C Capital |
100 |
600 |
|
|
3,800 |
|
|
3,800 |
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
A |
B |
C |
D |
Particulars |
A |
B |
C |
D |
|
Revaluation |
|
2,000 |
|
|
Balance b/d |
60,000 |
60,000 |
40,000 |
|
|
(Personal Exp.) |
|
|
|
|
Creditors |
|
|
|
10,000 |
|
Revaluation (Loss) |
300 |
200 |
100 |
|
Cash |
|
|
|
40,000 |
|
Balance c/d |
61,800 |
57,800 |
39,900 |
50,000 |
Revaluation (Exp.) |
2,100 |
|
|
|
|
|
62,100 |
60,000 |
40,000 |
50,000 |
|
62,100 |
60,000 |
40,000 |
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01,2019 after D’s admission |
|||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Capital Accounts: |
|
Land and Building |
50,000 |
||
|
A |
61,800 |
|
Plant and Machinery |
40,000 |
|
|
B |
57,800 |
|
Furniture |
30,000 |
|
|
C |
39,900 |
|
Prepaid Advt. Expenses |
1,200 |
|
|
D |
50,000 |
2,09,500 |
Stock |
20,000 |
|
|
|
|
|
Debtors |
30,000 |
|
|
Creditors |
30,000 |
|
Add: B/R dishonor |
4,000 |
|
|
Less: D’s Capital |
10,000 |
20,000 |
Less: 5% Provision for D Debts |
(1,700) |
32,300 |
|
Bill Payable |
10,000 |
|
|
|
|
|
|
|
Bills Receivable |
|
20,000 |
|
|
|
|
Bank (10,000 + 40,000 - 4,000) |
46,000 |
||
|
|
2,39,500 |
|
2,39,500 |
||
|
|
|
|
|
||
WN1: Distribution of Loss on Revaluation
A's Capital will be debited by=600×36= ` 300
B's Capital will be debited by=600×26= ` 200
C's Capital will be debited by=600×16= ` 100
Page No 5.95:
Question 65:
On 31st March, 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3 : 1 was as follows:
|
BALANCE SHEET OF ABHIR AND
DIVYA as on 31st March, 2017 |
|||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Creditors |
2,20,000 |
Cash
at Bank |
1,40,000 |
||
|
Employees'
Provident Fund |
1,00,000 |
Debtors |
6,50,000 |
|
|
|
Investment
Fluctuation Fund |
1,00,000 |
Less:
Provision for Bad Debts |
50,000 |
6.00,000 |
|
|
General
Reserve |
1,20,000 |
Stock |
|
3,00,000 |
|
|
Capitals: |
|
Investments
(Market value ` 4,40,000) |
|
5,00,000 |
|
|
Abhir |
6,00,000 |
|
|
|
|
|
Divya |
4,00,000 |
10,00,000 |
|
|
|
|
|
15,40,000 |
|
15,40,000 |
||
|
|
|
|
|
||
They decided to admit Vibhor on 1st April, 2017 for
1/5th share.
(a) Vibhor shall bring ` 80,000 as his share of goodwill premium.
(b) Stock was overvalued by ` 20,000.
(c) A debtor whose dues of ` 5,000 were written off as bad debts, paid ` 4,000 in full settlement.
(d) Two months' salary @ ` 6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of
1/5th of the total capital of the new firm.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the reconstituted firm.
Answer:
|
In the books of Abhir, Divya and Vibhor |
||||||
|
Dr. |
Revaluation A/c |
Cr. |
||||
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|||
|
To
Stock A/c |
20,000 |
By
Cash A/c |
4,000 |
|||
|
To
Outstanding Salary A/c (6,000 × 2) |
12,000 |
By
Loss on Revaluation transferred to: |
28,000 |
|||
|
|
|
Abhir’s Capital A/c |
21,000 |
|
||
|
|
|
Divya’s Capital A/c |
7,000 |
|
||
|
|
|
|
|
|||
|
|
32,000 |
|
32,000 |
|||
|
|
|
|
|
|||
|
Dr. |
Partner’s Capital A/c |
Cr. |
|||||||
|
Particulars |
Abhir ` |
Divya ` |
Vibhor ` |
Particulars |
Abhir ` |
Divya ` |
Vibhor ` |
||
|
To
Revaluation A/c (Loss) |
21,000 |
7,000 |
|
By
balance b/d |
6,00,000 |
4,00,000 |
|
||
|
|
|
|
|
By
Bank A/c (WN2) |
|
|
3,03,000 |
||
|
To
balance c/d |
7,59,000 |
4,53,000 |
3,03,000 |
By
Premium for Goodwill A/c |
60,000 |
20,000 |
|
||
|
|
|
|
|
By
Investment Fluctuation |
30,000 |
10,000 |
|
||
|
|
|
|
|
Fund
A/c (1,00,000 – 40,000) |
|
|
|
||
|
|
|
|
|
By
General Reserve A/c |
90,000 |
30,000 |
|
||
|
|
|
|
|
|
|
|
|
||
|
|
7,80,000 |
4,60,000 |
3,03,000 |
|
7,80,000 |
4,60,000 |
3,03,000 |
||
|
|
|
|
|
|
|
|
|
||
Working Notes:
1. Calculation of New profit-sharing ratio
|
Vibhor’s Share of Profits |
= |
1/5 |
|
Remaining
Profits |
= |
(1
– 1/5) = 4/5 |
|
Abhir’s New Share of Profits |
= |
(3/5
× 4/5) = 12/25 |
|
Divya’s New Share of Profits |
= |
(2/5
× 4/5) = 8/25 |
|
Abhir : Divya
: Vibhor |
= |
12
: 8 : 5 |
2. Calculation of Vibhor’s Capital
Total Adjusted Capital of the Old Partners = Abhir’s
Capital + Divya’s Capital= ` (7,59,000 + 4,53,000) = ` 12,12,000
Combined New Share of the Old Partners = (12/25 + 8/25) = 20/25
|
Total
Capital of the firm |
= |
(Adjusted
Capital of the Old Partners × Reciprocal of Combined New Share of the Old
Partners) |
||||||
|
|
= |
(12,12,000
× 25/20) = ` 15,15,000 |
||||||
|
Vibhor’s Capital |
= |
Total
Capital of the firm × His Profit share |
||||||
|
|
= |
` (15,15,000 × 1/5) = ` 3,03,000 |
||||||
|
|
|
|||||||
|
as at 31st March, 2018 |
|
|||||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
|
||||
|
Capitals: |
|
Cash
at Bank |
5,27,000 |
|
||||
|
Abhir |
7,59,000 |
|
(1,40,000
+ 4,000 + 3,03,000 + 80,000) |
|
|
|||
|
Divya |
4,53,000 |
|
Debtors |
6,50,000 |
|
|
||
|
Vibhor |
3,03,000 |
15,15,000 |
Less: Provision for Bad Debts |
50,00 |
6,00,000 |
|
||
|
Employee’s
Provident Fund |
1,00,000 |
Stock |
2,80,000 |
|
||||
|
Creditors |
2,20,000 |
Investments |
4,40,000 |
|
||||
|
Outstanding
Salary |
12,000 |
|
|
|
||||
|
|
|
|
|
|
||||
|
|
18,47,000 |
|
18,47,000 |
|
||||
|
|
|
|
|
|
||||