Balance Sheet as on 31st
March, 2010
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Capital
A/cs
|
|
Cash
at Bank
|
4000
|
|
Anil
|
24000
|
Debtors
|
15000
|
|
Sunil
|
16000
|
Stock
|
23500
|
|
Trade
Creditors
|
26000
|
Furniture
|
5000
|
|
Anil’s
Loan A/c
|
6500
|
Building
|
25,000
|
|
|
72,500
|
|
72,500
|
On 1st April, 2010,
Ram is admitted in the partnership on the following terms:
(1) Ram should bring in cash of
Rs. 12,000 as capital for 1/5th share in future profit.
(2) Goodwill A/c is raised in the
books of the firm for Rs. 4,500.
(3) Building is revalued at Rs.
28,000 and the value of stock be reduced by Rs. 1,500.
(4) Reserve for doubtful debts be
provided at 5% on debtors.
Prepare:
(a) Profit and Loss Adjustment
account.
(b) Capital Accounts of partners.
(c) Balance Sheet of the new
firm.
Solution:
In the books of Partnership Firm
Profit & Loss Adjustment Account
|
Particulars
|
Amount
|
Amount
|
Particulars
|
Amount
|
Amount
|
|
To Stock A/c
[Reduction in Value]
|
|
1500
|
By Building A/c
[Appreciation in value)
|
|
3000
|
|
To R.D.D. A/c
(RDD created)
|
|
750
|
|
|
|
|
To Partners’ Capital A/c
|
|
|
|
|
|
|
Anil
|
500
|
|
|
|
|
|
Sunil
|
250
|
750
|
|
|
|
|
|
|
3000
|
|
|
3000
|
Partners’ Capital Accounts
|
Particulars
|
Anil
|
Sunil
|
Ram
|
Particulars
|
Anil
|
Sunil
|
Ram
|
|
|
|
|
|
By Balance C/d
|
24000
|
16000
|
-
|
|
|
|
|
|
By Bank A/c
[Capital Contributed]
|
|
|
12000
|
|
|
|
|
|
By Goodwill A/c
[Transfer]
|
3000
|
1500
|
-
|
|
|
|
|
|
By Profit & Loss Adjustment
A/c
[Accumulated Profit]
|
500
|
250
|
-
|
|
To Balance c/d
|
27500
|
17750
|
12000
|
|
|
|
|
|
|
27500
|
17750
|
12000
|
|
27500
|
17750
|
12000
|
Balance Sheet as on 1st April, 2010
|
Liabilities
|
Amount
|
Amount
|
Assets
|
Amount
|
Amount
|
|
Trade Creditors
|
|
26000
|
Building
|
25000
|
|
|
Anil’s Loan
|
|
6500
|
Add: Appreciation
|
3000
|
28000
|
|
Partners’ Capital A/c
|
|
|
Furniture
|
|
5000
|
|
Anil
|
27500
|
|
Stock
|
23500
|
|
|
Sunil
|
17750
|
|
Less: Reduction in value
|
-1500
|
22000
|
|
Ram
|
12000
|
57250
|
Debtors
|
15000
|
|
|
|
|
|
Less: RDD @ 5%
|
750
|
14250
|
|
|
|
|
Cash at bank
|
|
16000
|
|
|
|
|
Goodwill
|
|
4500
|
|
|
|
89750
|
|
|
89750
|
Working Notes:
(i) Transfer of Goodwill in the
ration 2:1
Anil’s Capital A/c = (2 ÷ 3) × 4500 = Rs. 3000
Sunil’s Capital A/c = (1÷ 3) × 4500
= Rs. 1500
Goodwill A/c
|
Particulars
|
Amount
|
Particulars
|
Amount
|
|
To Anil’s Capital A/c
|
3000
|
|
|
|
To Sunil’s Capital A/c
|
1500
|
By Balance C/d
|
4500
|
|
|
4500
|
|
4500
|
Now, the Balance in Goodwill A/c is shown on
the Assets side of Balance Sheet.
Working Note: Transfer of Profit on
Revaluation A/c in the ratio of 2:1
Anil’s Capital A/c = (2÷ 3) × 750
= Rs. 500
Sunil’s Capital A/c = (1÷ 3) × 750
= Rs. 250.