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Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31-12-2017. A and B share profits and losses in the ratio of 2 : 1. BALANCE SHEET OF A AND B as on 31st December, 2017 LiabilitiesAmount AssetsAmount(Rs) (Rs) Bills Payable10,000Cash in Hand10,000Creditors58,000Cash at Bank40,000Outstanding Expenses2,000Sundry Debtors60,000Capitals :Stock40,000A1,80,000Plant1,00,000B1,50,000––––––––––3,30,000––––––––––Buildings1,50,000––––––––––4,00,0004,00,000 C is admitted as a partner on the date of the Balance Sheet on the following terms: (i) C will bring Rs 1,00,000 for his capital and Rs 60,000 as his share of goodwill for 1/4th share in the profits. (ii) Plant is to be appreciated to Rs 1,20,000 and the value of buildings is to be appreciated by 10%. (iii) Stock is found over valued by Rs 4,000. (iv) A provision for bad and doubtful debts is to be created at 5% of debtors. (v) Creditors were unrecorded to the extent of Rs 1,000. Pass the necessary Journal entries at the time of admission of C. Also prepare a Balance Sheet. OR Pankaj, Naresh and Somesh are partners sharing profits in the ratio of 3 : 2 : 1. Naresh retired from the firm due to his illness. On that date the Balance Sheet of the firm was as follows: BALANCE SHEET as on 31st March, 2017 LiabilitiesAmount AssetsAmount(Rs) (Rs) General Reserve12,000Bank7,600Sundry Creditors15,000Debtors6,000Bills Payable12,000Less: Provision forOutstanding Salary2,200 Doubtful Debt(400)––––––5,600Provision for Legal Damages6,000Stock9,000Capitals :Furniture41,000 Pankaj46,000Premises80,000 Naresh30,000 Somesh20,000––––––––96,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,43,200¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,43,200 Additional Information : (i) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for Rs 1,200 and furniture to be brought up to Rs 45,000. (ii) Goodwill of the firm be valued at Rs 42,000. (iii) Rs 26,000 from Naresh's capital account be transferred to his loan account and balance be paid through bank; if required, necessary loan may be obtained from Bank. (iv) New profit sharing ratio of Pankaj and Somesh is decided to be 5 : 1. Give the necessary Ledger Accounts at the time of Naresh's retirement. |
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Answer» Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31-12-2017. A and B share profits and losses in the ratio of 2 : 1. BALANCE SHEET OF A AND B C is admitted as a partner on the date of the Balance Sheet on the following terms: (i) C will bring Rs 1,00,000 for his capital and Rs 60,000 as his share of goodwill for 1/4th share in the profits. (ii) Plant is to be appreciated to Rs 1,20,000 and the value of buildings is to be appreciated by 10%. (iii) Stock is found over valued by Rs 4,000. (iv) A provision for bad and doubtful debts is to be created at 5% of debtors. (v) Creditors were unrecorded to the extent of Rs 1,000. Pass the necessary Journal entries at the time of admission of C. Also prepare a Balance Sheet. OR Pankaj, Naresh and Somesh are partners sharing profits in the ratio of 3 : 2 : 1. Naresh retired from the firm due to his illness. On that date the Balance Sheet of the firm was as follows: BALANCE SHEET Additional Information : (i) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for Rs 1,200 and furniture to be brought up to Rs 45,000. (ii) Goodwill of the firm be valued at Rs 42,000. (iii) Rs 26,000 from Naresh's capital account be transferred to his loan account and balance be paid through bank; if required, necessary loan may be obtained from Bank. (iv) New profit sharing ratio of Pankaj and Somesh is decided to be 5 : 1. Give the necessary Ledger Accounts at the time of Naresh's retirement. |
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