Balance Sheet as on 31st March, 2013
Liabilities
|
Amount
|
Assets
|
Amount
|
Capitals
|
Plant and Machinery
|
45000
| |
Dhiraj
|
125000
|
Land and Building
|
84000
|
Niraj
|
35000
|
Patents
|
3400
|
Creditors
|
86200
|
Stock
|
47800
|
Bills Payable
|
28000
|
Furniture
|
10600
|
General Reserve
|
6800
|
Debtors
|
80000
|
Cash
|
10200
| ||
281000
|
281000
|
On 1st April, 2013 they agreed to admit Suraj on the following terms and conditions:
i. Suraj to bring for 1/3 rd share in future profit in cash Rs. 90,000 towards his capital.
ii. The firm's goodwill should be raised to Rs. 90,000 and it is to be written off after Suraj admission in new profit ratio.
iii. Plant and Machinery was found undervalued by 10% and Land and Building was found overvalued by 20%.
iv. Stock is to be increased by Rs. 2,200 and furniture to be reduced to Rs. 10,000.
v. Out of creditors Rs. 1200 is no more payable.
vi. The Capital Accounts to be adjusted in new profit sharing ratio by opening the current accounts.
Prepare Revaluation Account, Capital Accounts and New Balance Sheet.
Solution:
In the books of Partnership firm.
Profit and Loss Adjustment Account
Particulars
|
Rs.
|
Rs.
|
Particulars
|
Rs.
|
Rs.
|
To Land & Buildings A/c
(Overvaluation )
|
14000
|
By Plant & Machinery A/c
(Undervaluation)
|
5000
| ||
To Furniture A/c
(Depreciation )
|
600
|
By Stock A/c
(Increase in value)
|
2200
| ||
By Creditors A/c
[Claim waived]
|
1200
| ||||
By Partner's Capital A/c
| |||||
Dhiraj
|
3100
| ||||
Niraj
|
3100
|
6200
| |||
14600
|
14600
|
Partner's Capital Accounts
Particulars
|
Dhiraj
|
Niraj
|
Suraj
|
Particulars
|
Dhiraj
|
Niraj
|
Suraj
|
To Goodwill A/c
[Written off]
|
30000
|
30000
|
30000
|
By Balance b/d
|
125000
|
35000
|
-
|
To Profit & Loss Adjustment A/c
|
3100
|
3100
|
-
|
By General Reserve
|
3400
|
3400
|
-
|
To Balance C/d
|
90000
|
90000
|
90000
|
By Cash A/c
|
-
|
-
|
90000
|
To Partner's Current A/c
|
50300
|
-
|
-
|
By Goodwill A/c
|
45000
|
45000
|
-
|
By Partners' Current A/c
|
-
|
39700
|
30000
| ||||
173400
|
123100
|
120000
|
173400
|
123100
|
12000
|
Balance Sheet as on 1st April, 2013
Liabilities
|
Amount
|
Amount
|
Assets
|
Amount
|
Amount
|
Partners' Capital A/c
|
Land & Building
|
84000
| |||
Dhiraj
|
90000
|
(-) Overvaluation by 20%
|
(14000)
|
70000
| |
Niraj
|
90000
|
Plant & Machinery
|
45000
| ||
Suraj
|
90,000
|
270000
|
(+) Under valuation by 10%
|
5000
|
50000
|
Dhiraj's Current A/c
|
50300
|
Furniture
|
10600
| ||
Bills Payable
|
28000
|
(-) Depreciation
|
-600
|
10000
| |
Creditors
|
86200
|
Patents
|
3400
| ||
(-) Claim waived by creditors
|
-1200
|
85000
|
Stock
|
47800
| |
(+) Increase in value
|
2200
|
50000
| |||
Debtors
|
80000
| ||||
Cash
|
100200
| ||||
Current A/c
| |||||
Niraj
|
39700
| ||||
Suraj
|
30000
|
69700
| |||
433300
|
433300
|
