omtexclasses.com: Vrushali and Leena are equal partners in the business. Their Balance sheet as on 31 March 2018 stood as under. Admission of Partner Practical Problems | Q 6

Vrushali and Leena are equal partners in the business. Their Balance sheet as on 31 March 2018 stood as under. Admission of Partner Practical Problems | Q 6 | Page 164

PRACTICAL PROBLEMS [PAGES 161-167]

Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board Chapter 3 Reconstitution of Partnership (Admission of Partner) Practical Problems [Pages 161 - 167]

Practical Problems | Q 6 | Page 164

Vrushali and Leena are equal partners in the business. Their Balance sheet as on 31 March 2018 stood as under.

Balance Sheet as on 31 March 2018

Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Sundry Creditors	90,000	90,000	Cash in Bank		62,000
Capitals:			Debtors	31,000
Vrushali	45,000	75,000	Less: R.D.D	1,000	30,000
Leena	30,000		Building		55,000
General Reserves		18,000	Machinery		24,000
			Bills Receivable		12,000
		1,83,000			1,83,000

They decided to admit Aparna on 1st April 2018 on the following terms:

1. The Machinery and Building be depreciated by 10%. Reserve for Doubtful Debts to be increased by ₹ 5,000

2. Bills Receivable are taken over by Vrushali at the discount of 10%

3. Aparna should bring ₹ 60,000 as capital for her 1/4th share in future profits.

4. The capital accounts of all the partners be adjusted in proportion in the new profit sharing ratio by opening current accounts of the partners.

Prepare Profit and Loss Adjustment A/c, Partner’s Capital A/c, Balance sheet of the new firm.

Solution:

Dr.	Profit and Loss Adjustment Account				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Machinery A/c		2,400	By Loss on Revaluation
To Building A/c		5,500	Transferred to Partners’ Capital A/cs :
To R.D.D. A/c		5,000	Vrushali7,050 Leena 7,050	14,100
To Bills Receivable A/c (Discount)		1,200
		14,100		14,100

Dr	Partners’ Capital Accounts								Cr
Particulars		Vrushali (₹)	Leena (₹)	Aparna (₹)	Particulars	Vrushali (₹)	Leena (₹)	Aparna (₹)
To Revaluation A/c		7,050	7,050		By Balance b / d	45,000	30,000
(Loss) To Bills Receivable A/c		10,800			By Bank A/c			60,000
To Balance c / d		90,000	90,000	60,000	By General Reserve A/c	9,000	9,000
					By Partner’s Current A/c	53,850	58,050
		1,07,850	97,050	60,000		1,07,850	97,050	60,000

Balance Sheet as on 1st April 2018

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital A/cs : Vrushali Leena Aparna	90,000 90,000 60,000	2,40,000	Cash in Bank		1,22,000
Sundry Creditors		90,000	Debtors Less : R.D.D. (1000 + 5000)	31,000 6,000	25,000
			Building Less: Depreciation	55,000 5,500	49,500
			Machinery Less: Depreciation	24,000 2,400	21,600
			Partners’ Current A/cs : Vrushali Leena	53,850 58,050	1,11,900
		3,30,000			3,30,000

Vrushali and Leena are equal partners in the business. Their Balance sheet as on 31 March 2018 stood as under. Admission of Partner Practical Problems | Q 6 | Page 164

Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board Chapter 3 Reconstitution of Partnership (Admission of Partner) Practical Problems [Pages 161 - 167]

Practical Problems | Q 5 | Page 163

Mr. Kishor & Mr. Lal were in partnership sharing profits & losses in the proportion of 3/4 and 1/4 respectively.

Balance Sheet as on 31 March 2018

Liabilities	Amt ₹	Amt ₹	Assets	Amt ₹	Amt ₹
Creditors		1,20,000	Land and Building		75,000
General Reserve		12,000	Furniture		6,000
Capital A/c: Kishor Lal	90,000 48,000	1,38,000	Stock		60,000
			Debtors		60,000
			Bills Receivable		39,000
			Cash at Bank		30,000
		2,70,000			2,70,000

They decided to admit Ram on 1 April 2018 on following terms:

1. He should be given 1/5th share in profit and for that he brought in ₹ 60,000 as capital through RTGS.

2. Goodwill should be raised at ₹ 60,000

3. Appreciate Land and Building by 20%

4. Furniture and Stock are to be depreciated by 10%

5. The Capitals of all partners should be adjusted in their new profit sharing ratio through Bank A/c.

Pass necessary Journal Entries in the books of the Partnership firm and a Balance sheet of the new firm.

Solution:

Journal entries in the books of the firm

Date	Particulars	L.F	Debit (₹)	Credit (₹)
2018 April 1	General Reserve A/c Dr. To Mr. Kishor’s Capital A/c To Mr. Lal’s Capital A/c (Being general reserve distributed among old partners)		12,000	9,000 3,000
1	Profit and Loss Adjustment A/c Dr. To Furniture A/c To Stock A/c (Being decrease in the value of assets)		6,600	600 6,000
1	Land and Building A/c Dr. To Profit and Loss Adjustment A/c (Being increase in the value of assets)		15,000	15,000
1	Profit and Loss Adjustment A/c Dr. To Mr. Kishor’s Capital A/c To Mr. Lal’s Capital A/c (Being profit on revaluation distributed in profit sharing ratio)		8,400	6,300 2,100
1	Bank A/c Dr. To Ram’s Capital A/c (Being capital amount brought in through RTGS)		60,000	60,000
1	Goodwill A/c Dr. To Kishor’s Capital A/c To Lal’s Capital A/c (Being the goodwill raised and transferred to capital A/cs in their old ratio)		60,000	45,000 15,000
1	Bank A/c Dr. To Kishor’s Capital A/c (Being deficit in capital account settled in cash by Kishor)		29,700	29,700
1	Lal’s Capital A/c Dr. To Bank A/c (Being surplus capital amount paid to Lal)		8,100	8,100

Dr.	Balance Sheet as on 1st April 2018						Cr.
Liabilities		Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Accounts: Mr. Kishor Mr. Lal Ram		1,80,000 60,000 60,000	3,00,000	Land & Building Add: Appreciation	75,000 15,000	90,000
Creditors			1,20,000	Furniture Less: Depreciation	6,000 600	5,400
				Stock Less : Depreciation	60,000 6,000	54,000
				Debtors		60,000
				Goodwill		60,000
				Bills Receivable		39,000
				Cash at Bank		1,11,600
			4,20,000			4,20,000

Working Notes :

(1)

Dr	Partners’ Capital Accounts								Cr
Particulars		Kishor (₹)	Lal (₹)	Ram (₹)	Particulars	Kishor (₹)	Lal (₹)	Ram (₹)
To Bank A/c			8,100		By Balance b / d	90,000	48,000
To Balance c / d		1,80,000	60,000	60,000	By Bank A/c			60,000
					By Goodwill A/c	45,000	15,000
					By General Reserve A/c	9,000	3,000
					By Revaluation A/c (Profit)	6,300	2,100
					By Bank A/c	29,700
		1,80,000	68,100	60,000		1,80,000	68,100	60,000

Bank Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b / d	30,000	By Lal’s Capital A/c	8,100
To Ram’s Capital A/c	60,000	By Balance c / d	1,11,600
To Kishor’s Capital A/c	29,700
	1,19,700		1,19,700

Mr. Kishor & Mr. Lal were in partnership sharing profits & losses in the proportion of 3/4 and 1/4 respectively Practical Admission of Partner Problems | Q 5 | Page 163

PRACTICAL PROBLEMS [PAGES 161 - 167]

Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board Chapter 3 Reconstitution of Partnership (Admission of Partner) Practical Problems [Pages 161 - 167]

Practical Problems | Q 1 | Page 161

Practical Problems | Q 2 | Page 161

Practical Problems | Q 3 | Page 162

Practical Problems | Q 4 | Page 163

Practical Problems | Q 5 | Page 163

Practical Problems | Q 6 | Page 164

Practical Problems | Q 7 | Page 164

Practical Problems | Q 8 | Page 165

Practical Problems | Q 9 | Page 166

Practical Problems | Q 10 | Page 167

Select appropriate alternatives from those given below and rewrite the sentence.

Write a word/phrase/term which can substitute the following statement.