A and B are partners in a firm sharing profits and losses in the ratio

1.	A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2017, their Balance Sheet was as under: Capital and LiabilitiesRsAssetsRsCreditors70,000Bank40,000Capital A/cs:Debtors1,20,000 A 1,50,000Stock60,000 B 80,000––––––––2,30,000Furniture50,000Goodwill30,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,00,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,00,000–––––––––– On the above date C is admitted as a partner. A surrendered 16th of his share and B 13rd of his share in favour of C. Goodwill is valued at Rs 1,20,000. C brings in only 12 of his share of goodwill in cash and Rs 1,00,000 as his capital. Following adjustments are agreed upon: (i) Stock is to be reduced to Rs 56,000 and furniture by Rs 5,000. (ii) There is an unrecorded asset worth Rs 20,000. (iii) One month's rent of Rs 15,000 is outstanding. (iv) A creditor for goods purchased for Rs 10,000 had been omitted to be recorded although the goods had been correctly included in stock. (v) Insurance premium amounting to Rs 8,000 was debited to P & L A/c, of which Rs 2,000 is related to the period after 31st March, 2017. You are required to prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm. Also calculate the new profit sharing ratio.
Answer» A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2017, their Balance Sheet was as under: $\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 70, 000 & Bank & 40, 000 Capital A/cs: & Debtors & 1, 20, 000 A 1, 50, 000 & Stock & 60, 000 B 80, 000 - ------ - & 2, 30, 000 & Furniture & 50, 000 Goodwill & 30, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 00, 000 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 00, 000 - -------- - \end{matrix}$ On the above date C is admitted as a partner. A surrendered $\frac{1}{6} t h$ of his share and B $\frac{1}{3} r d$ of his share in favour of C. Goodwill is valued at Rs 1,20,000. C brings in only $\frac{1}{2}$ of his share of goodwill in cash and Rs 1,00,000 as his capital. Following adjustments are agreed upon: (i) Stock is to be reduced to Rs 56,000 and furniture by Rs 5,000. (ii) There is an unrecorded asset worth Rs 20,000. (iii) One month's rent of Rs 15,000 is outstanding. (iv) A creditor for goods purchased for Rs 10,000 had been omitted to be recorded although the goods had been correctly included in stock. (v) Insurance premium amounting to Rs 8,000 was debited to P & L A/c, of which Rs 2,000 is related to the period after 31st March, 2017. You are required to prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm. Also calculate the new profit sharing ratio.

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2017, their Balance Sheet was as under: Capital and LiabilitiesRsAssetsRsCreditors70,000Bank40,000Capital A/cs:Debtors1,20,000 A 1,50,000Stock60,000 B 80,000––––––––2,30,000Furniture50,000Goodwill30,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,00,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,00,000–––––––––– On the above date C is admitted as a partner. A surrendered 16th of his share and B 13rd of his share in favour of C. Goodwill is valued at Rs 1,20,000. C brings in only 12 of his share of goodwill in cash and Rs 1,00,000 as his capital. Following adjustments are agreed upon: (i) Stock is to be reduced to Rs 56,000 and furniture by Rs 5,000. (ii) There is an unrecorded asset worth Rs 20,000. (iii) One month's rent of Rs 15,000 is outstanding. (iv) A creditor for goods purchased for Rs 10,000 had been omitted to be recorded although the goods had been correctly included in stock. (v) Insurance premium amounting to Rs 8,000 was debited to P & L A/c, of which Rs 2,000 is related to the period after 31st March, 2017. You are required to prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm. Also calculate the new profit sharing ratio.

Answer»

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2017, their Balance Sheet was as under:

$\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 70, 000 & Bank & 40, 000 Capital A/cs: & Debtors & 1, 20, 000 A 1, 50, 000 & Stock & 60, 000 B 80, 000 - ------ - & 2, 30, 000 & Furniture & 50, 000 Goodwill & 30, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 00, 000 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 3, 00, 000 - -------- - \end{matrix}$

On the above date C is admitted as a partner. A surrendered $\frac{1}{6} t h$ of his share and B $\frac{1}{3} r d$ of his share in favour of C. Goodwill is valued at Rs 1,20,000. C brings in only $\frac{1}{2}$ of his share of goodwill in cash and Rs 1,00,000 as his capital. Following adjustments are agreed upon:

(i) Stock is to be reduced to Rs 56,000 and furniture by Rs 5,000.

(ii) There is an unrecorded asset worth Rs 20,000.

(iii) One month's rent of Rs 15,000 is outstanding.

(iv) A creditor for goods purchased for Rs 10,000 had been omitted to be recorded although the goods had been correctly included in stock.

(v) Insurance premium amounting to Rs 8,000 was debited to P & L A/c, of which Rs 2,000 is related to the period after 31st March, 2017.

You are required to prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm. Also calculate the new profit sharing ratio.

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