Page 127 - DEBKVOL-1

Chapter 5 Admission of a Partner 5.43
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18. Following was the Balance Sheet of A, B and C sharing profits and losses in the proportion of 6/14,
5/14 and 3/14 respectively:
Liabilities ` Assets `
Capital A/cs: Land and Building 50,400
A 36,900 Furniture 7,350
B 33,600 Stock 29,400
C 19,800 90,300 Debtors 26,460
Creditors 18,900 Cash 1,890
Bills Payable 6,300
1,15,500 1,15,500

They agreed to take D into partnership and give him 1/8th share on the following terms:
(a) D should bring in ` 16,000 as his capital.
(b) Furniture be reduced by ` 920.
(c) Stock be reduced by 10%.
(d) A provision of ` 1,320 be made for outstanding repair bills.
(e) The value of Land and Building having appreciated be brought up to ` 65,100.
(f ) D should bring in ` 8,820 as his share of goodwill.
(g) After making the above adjustments the Capital Accounts of the old partners (who continue to share
in the same proportions as above) be adjusted on the basis of the proportions of D’s Capital to his
share in the business.
Pass Journal entries to give effect to the above arrangements and prepare opening Balance Sheet of the
firm as newly constituted.
[Ans.: Gain (Profit) on Revaluation—` 9,520; Partners’ Capital Accounts: A—` 48,000;
B—` 40,000; C—` 24,000; D—` 16,000; Balance Sheet Total—` 1,54,520.]
19. Hari and Ram were in partnership, sharing profits and losses equally. On 1st April, 2017, Suraj was admitted
into partnership on the following terms:
Suraj is to have 1/6th share in the profits/losses, which he had got from Hari paying him ` 40,000 for
that share as goodwill. Out of this amount, Hari is to withdraw ` 30,000 and the balance amount is to
remain in the firm. It was further agreed that the value of Investments should be reduced to ` 18,000
and Plant to be valued at ` 29,000. Creditors were to be reduced by ` 3,000 as one of the creditors has
closed his business and gone. Suraj is to bring in proportionate capital on his admission.
The Balance Sheet as at 31st March, 2017 was:
Liabilities ` Assets `
Creditors 1,05,000 Cash at Bank 40,000
Capital A/cs: Book Debts 60,000
Hari 60,000 Stock 50,000
Ram 60,000 1,20,000 Investments 30,000
Furniture 10,000
Plant 35,000
2,25,000 2,25,000

The profit for the year ended 31st March, 2018 was ` 60,000 and the drawings were:
Hari ` 15,000; Ram ` 22,500 and Suraj ` 7,500. Journalise the entries on Suraj’s admission and give the
Capital Accounts and the Balance Sheet as at 31st March, 2018.
[Ans.: Revaluation Loss—` 15,000; Capital Accounts (31.3.2018): Hari—` 67,500;
Ram—` 60,000; Suraj—` 25,500; Balance Sheet Total—` 2,55,000.]