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Chapter 5 Admission of a Partner 5.31
.
BALANCE SHEET OF THE NEW FIRM as at 31st March, 2018
Liabilities ` Assets `
Bills Payable 5,000 Cash (` 24,000 + ` 40,000) 64,000
Creditors 27,000 Stock (` 30,000 – ` 3,000) 27,000
Claim for Damages 2,000 Debtors 48,000
Capital A/cs: Less: Provision for Doubtful Debts 2,400 45,600
Usha 50,800 Building 20,400
Asha 42,200
Neelam 30,000 1,23,000
1,57,000 1,57,000

Note: Neelam’s Share of Goodwill = ` 50,000 × 1/5 = ` 10,000.
Illustration 24.
Annu and Mannu are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as
at 31st March, 2009 was as follows:

BALANCE SHEET OF ANNU AND MANNU as at 31st March, 2009
Liabilities ` Assets `
Creditors 56,000 Cash in Hand 77,000
General Reserve 10,000 Debtors 42,000
Investments Fluctuation Fund 4,000 Less: Provision for Doubtful Debts 7,000 35,000
Capital A/cs: Investments (Market value ` 19,000) 21,000
Annu 1,19,000 Building 98,000
Mannu 1,12,000 2,31,000 Plant and Machinery 70,000
3,01,000 3,01,000
Sonu was admitted on that date for 1/4th share of profit on the following terms:
(i) Sonu will bring ` 56,000 as his share of capital.
(ii) Goodwill of the firm is valued at ` 84,000 and Sonu will bring his share of Goodwill in cash.
(iii) Plant and Machinery is appreciated by 20%.
(iv) All Debtors are good.
(v) There is a liability of ` 9,800 included in Sundry Creditors, which is not likely to arise.
(vi) New profit-sharing ratio will be 2 : 1 : 1.
(vii) Capitals of Annu and Mannu will be adjusted on the basis of Sonu’s share of capital
and any excess or deficiency will be made good by withdrawing or bringing in cash
by the concerned partners as the case may be.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new
firm. (Delhi 2012 C)
Solution:
Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `
To Gain (Profit) transferred to: By Plant and Machinery A/c 14,000
Annu’s Capital A/c 18,480 By Provision for Doubtful Debts A/c* 7,000
Mannu’s Capital A/c 12,320 30,800 By Creditors A/c 9,800
30,800 30,800
* All Debtors are good means Provision for Doubtful Debts is no longer required and hence is
credited to Revaluation Account.