Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. Their Balance Sheet at 31st March, 2018 stood as: Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit-sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for goodwill. So it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation s are made: (a) Stock to depreciate by 5% ; (b) Provision for Doubtful Debts is to be ₹ 500; (c) Furniture to depreciate by 10% ; (d) Building is valued at ₹ 40,000. Show necessary Ledger Accounts and Balance Sheet of new firm.

Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. The

1.	Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. Their Balance Sheet at 31st March, 2018 stood as: Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit-sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for goodwill. So it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation s are made: (a) Stock to depreciate by 5% ; (b) Provision for Doubtful Debts is to be ₹ 500; (c) Furniture to depreciate by 10% ; (d) Building is valued at ₹ 40,000. Show necessary Ledger Accounts and Balance Sheet of new firm.
Answer» essary Ledger Accounts and Balance Sheet of new firm are calculated below:EXPLANATION:CALCULATION of Sacrificing RatioOld Ratio (Rajesh and Ravi) =3: 2New Ratio (Rajesh, Ravi and Raman) =5: 3: 2Sacrifidng Ratio = Old Ratio-New RAIO Rajesh's Sacrificing Ratio Ravi's Sacrificing Ratio Sacrificing Ratio of Rajesh and Ravi Calculation of Goodwill Actual Capital of all Partners before adjustment of goodwill = Rajesh Capital + Ravi's Capital + Raman Capital Capitalised VALUE on the basis of Raman's share Goodwill of the firm = Capitalised value of the firm - actual capital of all partners before adjustment of goodwill Raman's Share of Goodwill Adjusment of Raman's share of goodwill Rajesh's Capital A/c will be credited Ravi's Capital A/c will be credited Distribution of profit on Revaluation (Old Ratio) Rajesh's profit on Revaluation Ravi's profit on Revaluation

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