Page 130 - DEBKVOL-1

5.46 Double Entry Book Keeping—CBSE XII

24. Amrit and Baldev were carrying on business in partnership sharing profits in the ratio of 3 : 2. Their
Balance Sheet as at 31st March, 2018 was:
Liabilities ` Assets `
Amrit’s Capital 50,000 Land and Building 25,000
Baldev’s Capital 25,000 75,000 Furniture 10,000
Creditors 16,000 Stock 46,000
Bills Payable 14,000 Debtors 20,000
Less: Provision for Doubtful Debts 600 19,400
Cash at Bank 4,600
1,05,000 1,05,000

Chetan is admitted into parstnership on the following terms:
(a) New profit-sharing ratio of Amit, Baldev and Chetan will be 5 : 3 : 2.
(b) Land and Building is to be appreciated by ` 5,000; Furniture is to be depreciated by 10%, Provision for
Doubtful Debts is to be increased by ` 300 and Outstanding Expenses of ` 200 are to be recorded.
(c) Chetan will bring ` 20,000 as his capital and ` 6,000 as his share of goodwill.
(d) The capitals of all the partners will be in their profit-sharing ratio; Amrit and Baldev making the
necessary adjustments in cash.
Prepare (i) Revaluation Account; (ii) Partners’ Capital Accounts; (iii) Bank Account and (iv) Balance Sheet
immediately after recording the above-mentioned transactions.
[Ans.: Gain (Profit) on Revaluation—` 3,500; Capital A/cs: Amrit—` 50,000; Baldev—` 30,000;
Chetan—` 20,000; Balance Sheet Total—` 1,30,200.]
25. Jain and Gupta were partners in a firm sharing profits and losses in the ratio of 4 : 3. The following is
the Balance Sheet of the firm as at 31st March, 2018:
BALANCE SHEET OF JAIN AND GUPTA as at 31st March, 2018
Liabilities ` Assets `
Sundry Creditors 20,000 Cash 14,800
Bills Payable 3,000 Debtors 20,500
Bank Overdraft 17,000 Less: Provision for Doubtful Debts 300 20,200
Capital A/cs: Stock 20,000
Jain 70,000 Plant 40,000
Gupta 60,000 1,30,000 Building 75,000
1,70,000 1,70,000
They agreed to admit Mishra as partner with effect from 1st April, 2018 with 1/4th share in profits on
the following terms:
(a) Mishra will bring in capital to the extent of 1/4th of the total capital of the new firm after all
adjustments have been made.
(b) Building is to be appreciated by ` 14,000 and Plant to be depreciated by ` 7,000.
(c) The provision for doubtful debts on Debtors is to be raised to ` 1,000.
(d) Mishra will bring in ` 21,000 as his share of goodwill.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the firm immediately
after Mishra’s admission.
[Ans.: Gain (Profit) on Revaluation—` 6,300; Balance Sheet Total—` 2,49,733.]
[Hint: Calculation of Mishra’s Capital: Combined Capital of Jain and Gupta (after adjustments) for
3/4th share = ` 85,600 + ` 71,700 = ` 1,57,300
New Firm’s Total Capital = ` 1,57,300 × 4/3
Mishra’s Capital for 1/4th share = ` 1,57,300 × 4/3 × 1/4 = ` 52,433.]