Page 118 - ISCDEBK-12

5.16 Double Entry Book Keeping (Section A)—ISC XII

3. Total Capital of the New Firm = Adjusted Capital of All Partners – Cash Available for Payment
Hari’s Adjusted Capital = ` 40,000 + ` 5,000 + ` 8,000 + ` 32,000 + ` 42,500 – ` 2,750 – ` 2,500 – ` 2,500
= ` 1,19,750.
Sonu’s Adjusted Capital = ` 62,000 + ` 3,000 + ` 25,500 – ` 1,650 – ` 1,500 – ` 1,500 – ` 8,000
= ` 77,850.
Zubin’s Adjusted Capital = ` 33,000 + ` 2,000 + ` 17,000 – ` 1,100 – ` 32,000 – ` 1,000 – ` 1,000
= ` 16,900.
Cash Available for Payment = ` 40,000 – ` 8,000 – ` 15,000 = ` 17,000
Total Capital of New Firm = ` 1,19,750 + ` 77,850 + ` 16,900 – ` 17,000 = ` 1,97,500
2
Sonu’s New Capital = ` 1,97,500 × = ` 79,000
5

Zubin’s New Capital = ` 1,97,500 × 3 = ` 1,18,500.
5
4. Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 40,000 By Creditors A/c 8,000
To Sonu’s Capital A/c 1,150 By Hari’s Capital A/c 1,19,750
To Zubin’s Capital A/c 1,01,600 By Balance c/d 15,000
1,42,750 1,42,750

Illustration 11.
Micky, Ricky and Vicky were partners sharing profits and losses in the ratio of 5 : 3 : 2. On 31st March, 2019
their Balance Sheet was as follows:
Liabilities ` Assets `
Sundry Creditors 55,000 Goodwill 25,000
Investment Fluctuation Reserve 17,500 Patents 1,30,000
Workmen Compensation Reserve 17,500 Machinery 1,56,000
Capital A/cs: Investments 15,000
Micky 3,37,500 Stock 50,000
Ricky 2,37,500 Sundry Debtors 62,000
Vicky 1,85,000 7,60,000 Less: Provision for Doubtful Debts 2,000 60,000
Loan to Vicky 5,000
Cash at Bank 29,000
Advertisement Expenditure 5,000
Profit and Loss A/c (2018–19) 3,75,000
8,50,000 8,50,000

Vicky died on 1st August, 2019. Vicky had withdrawn ` 25,000 during 2019–20. It was agreed between his
executors and the remaining partners that—
(i) Goodwill be valued at 2½ years’ purchase of average of four completed years’ profits which were:
2015–16 ` 5,05,000; 2016–17 ` 70,000; 2017–18 ` 80,000.
(ii) Vicky‘s Share of profit from the closure of last accounting year till date of death be calculated on the
basis of the average of three completed years’ profits before death.
(iii) Patents undervalued by ` 85,000; Machinery overvalued by ` 16,000.