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

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Ansh Vansh Dev Particulars Ansh Vansh Dev
` ` ` ` ` `

To Vansh’s Capital A/c 2,400 ... 5,600 By Balance b/d 80,000 60,000 40,000
(WN1) (Goodwill) By Ansh’s Capital A/c ... 2,400 ...
To Bank A/c ... 93,100 ... (WN 1)
(Balancing Figure) By Dev’s Capital A/c ... 5,600 ...
To Balance c/d (WN 3) 1,30,380 ... 86,920 (WN 1)
By Revaluation A/c (Gain) 150 100 50
By Reserve A/c 12,000 8,000 4,000
By Workmen
Compensation Reserve 3,000 2,000 1,000
By Profit and Loss
Suspense A/c 22,500 15,000 7,500
By Bank A/c (Bal. Fig.) 15,130 ... 39,970
1,32,780 93,100 92,520 1,32,780 93,100 92,520

Working Notes:

1. Adjustment of Goodwill:
Vansh’s Share of Goodwill = ` 24,000 × 2/6 = ` 8,000, which is contributed by Ansh and Dev in their Gaining Ratio
of 3 : 7.
Ansh’s contribution = ` 8,000 × 3/10 = ` 2,400; Dev’s contribution = ` 8,000 × 7/10 = ` 5,600.
2. Computation of Gaining Ratio (Gain = New Share – Old Share):
Ansh’s Gain = 3/5 – 3/6 = 3/30; Dev’s Gain = 2/5 – 1/6 = 7/30
Gaining Ratio = 3/30 : 7/30 or 3 : 7.
3. Cash to be brought in by Ansh and Dev: `
Amount payable to Vansh 93,100
Add: Amount to be retained as Working Capital 30,000
1,23,100
Less: Cash already available 68,000
Cash to be brought in by Ansh and Dev 55,100
Adjusted Old Capital of Ansh = ` (80,000 + 150 + 12,000 + 3,000 + 22,500 – 2,400) = ` 1,15,250.
Adjusted Old Capital of Dev = ` (40,000 + 50 + 4,000 + 1,000 + 7,500 – 5,600) = ` 46,950.
Total Capital of the New Firm = ` 55,100 + ` 1,15,250 + ` 46,950 = ` 2,17,300.

Ansh’s Capital in New Firm = ` 2,17,300 × 3/5 = ` 1,30,380;
Dev’s Capital in New Firm = ` 2,17,300 × 2/5 = ` 86,920.