X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31st March, 2018 is: They admit Z into partnership on 1st April, 2018 on the following terms: (a) Goodwill is to be valued at ₹ 1,00,000. (b) Stock and Furniture to be reduced by 10%. (c) A Provision for Doubtful Debts is to be created @ 5% on Sundry Debtors. (d) The value of Land and Building is to be appreciated by 20%. (e) Z pays ₹ 50,000 as his capital for 1/5th share in the future profits. You are required to show Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm. Note: Z’s Share of Goodwill ₹ 20,000 (i.e, ₹ 1,00,000 x 1/5 ) can be adjusted through Z’s Current A/c. In that situation, Partners Capital A/cs: X – ₹ 1,87,875; Y – ₹ 92,625; Z – ₹ 50,000; Z’s Current A/c (Dr.) – ₹ 20,000; Balance Sheet Total – ₹ 5,18,000.

X and Y are partners sharing profits and losses in the ratio of 3/4 an

1.	X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31st March, 2018 is: They admit Z into partnership on 1st April, 2018 on the following terms: (a) Goodwill is to be valued at ₹ 1,00,000. (b) Stock and Furniture to be reduced by 10%. (c) A Provision for Doubtful Debts is to be created @ 5% on Sundry Debtors. (d) The value of Land and Building is to be appreciated by 20%. (e) Z pays ₹ 50,000 as his capital for 1/5th share in the future profits. You are required to show Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm. Note: Z’s Share of Goodwill ₹ 20,000 (i.e, ₹ 1,00,000 x 1/5 ) can be adjusted through Z’s Current A/c. In that situation, Partners Capital A/cs: X – ₹ 1,87,875; Y – ₹ 92,625; Z – ₹ 50,000; Z’s Current A/c (Dr.) – ₹ 20,000; Balance Sheet Total – ₹ 5,18,000.
Answer» Revaluation of ASSETS: Building ₹ 18,000; Stock ₹ 16,000.A balance SHEET is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a BASIS for COMPUTING rates of return and evaluating its capital structure

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