Azad and Babli are partners in a firm sharing profits & losses in the

1.	Azad and Babli are partners in a firm sharing profits & losses in the ratio of 2 :1. Chintan is admitted in to the firm with 14 Share in profits. Chintan will bring in 30,000 as his capital and :ttie Capitals of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2006 (Before Chintan's admission) was as follows Balance Sheet of A and B as on 31.12.2016 Capital and LiabilitiesAmt. (Rs)AssetsAmt. (Rs)Creditors8,000Cash in hand2,000Bills Payable4,000Cash at bank10,000General Reserve6,000Sundry Debtors8,000Capital AccountsStock10,000Azad 50,000Furniture5,000Babli 32,000––––––––82,000Machinery25,000Buildings40,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,00,000––––––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,00,000–––––––––––––––––––– It was agreed that : (i) Chintan will bring in Rs. 12,000 as his share of good will premium. (ii) Buildings were valued at Rs. 45,000 and machinery at Rs. 23,000. (iii) A provision for doubtful debts is to be created 6% on debtors. (iv) The capital accounts of Mad and Babb are to be adjusted by opening current accounts. Record necessary journal entries, show necessary ledger accounts and prepare the balance sheet after admission.
Answer» Azad and Babli are partners in a firm sharing profits & losses in the ratio of 2 :1. Chintan is admitted in to the firm with $\frac{1}{4}$ Share in profits. Chintan will bring in 30,000 as his capital and :ttie Capitals of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2006 (Before Chintan's admission) was as follows $Balance Sheet of A and B$ $as on 31.12.2016$ $\begin{matrix} Capital and Liabilities & Amt. (Rs) & Assets & Amt. (Rs) Creditors & 8, 000 & Cash in hand & 2, 000 Bills Payable & 4, 000 & Cash at bank & 10, 000 General Reserve & 6, 000 & Sundry Debtors & 8, 000 Capital Accounts & Stock & 10, 000 Azad 50, 000 & Furniture & 5, 000 Babli 32, 000 - ------ - & 82, 000 & Machinery & 25, 000 Buildings & 40, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 00, 000 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 00, 000 - -------- - - -------- - \end{matrix}$ It was agreed that : (i) Chintan will bring in Rs. 12,000 as his share of good will premium. (ii) Buildings were valued at Rs. 45,000 and machinery at Rs. 23,000. (iii) A provision for doubtful debts is to be created 6% on debtors. (iv) The capital accounts of Mad and Babb are to be adjusted by opening current accounts. Record necessary journal entries, show necessary ledger accounts and prepare the balance sheet after admission.

Azad and Babli are partners in a firm sharing profits & losses in the ratio of 2 :1. Chintan is admitted in to the firm with 14 Share in profits. Chintan will bring in 30,000 as his capital and :ttie Capitals of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2006 (Before Chintan's admission) was as follows Balance Sheet of A and B as on 31.12.2016 Capital and LiabilitiesAmt. (Rs)AssetsAmt. (Rs)Creditors8,000Cash in hand2,000Bills Payable4,000Cash at bank10,000General Reserve6,000Sundry Debtors8,000Capital AccountsStock10,000Azad 50,000Furniture5,000Babli 32,000––––––––82,000Machinery25,000Buildings40,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,00,000––––––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,00,000–––––––––––––––––––– It was agreed that : (i) Chintan will bring in Rs. 12,000 as his share of good will premium. (ii) Buildings were valued at Rs. 45,000 and machinery at Rs. 23,000. (iii) A provision for doubtful debts is to be created 6% on debtors. (iv) The capital accounts of Mad and Babb are to be adjusted by opening current accounts. Record necessary journal entries, show necessary ledger accounts and prepare the balance sheet after admission.

Answer»

Azad and Babli are partners in a firm sharing profits & losses in the ratio of 2 :1. Chintan is admitted in to the firm with $\frac{1}{4}$ Share in profits. Chintan will bring in 30,000 as his capital and :ttie Capitals of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2006 (Before Chintan's admission) was as follows

$Balance Sheet of A and B$
$as on 31.12.2016$
$\begin{matrix} Capital and Liabilities & Amt. (Rs) & Assets & Amt. (Rs) Creditors & 8, 000 & Cash in hand & 2, 000 Bills Payable & 4, 000 & Cash at bank & 10, 000 General Reserve & 6, 000 & Sundry Debtors & 8, 000 Capital Accounts & Stock & 10, 000 Azad 50, 000 & Furniture & 5, 000 Babli 32, 000 - ------ - & 82, 000 & Machinery & 25, 000 Buildings & 40, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 00, 000 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 1, 00, 000 - -------- - - -------- - \end{matrix}$

It was agreed that :

(i) Chintan will bring in Rs. 12,000 as his share of good will premium.

(ii) Buildings were valued at Rs. 45,000 and machinery at Rs. 23,000.

(iii) A provision for doubtful debts is to be created 6% on debtors.

(iv) The capital accounts of Mad and Babb are to be adjusted by opening current accounts.

Record necessary journal entries, show necessary ledger accounts and prepare the balance sheet after admission.

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