Page 133 - DEBKVOL-1

Chapter 5 Admission of a Partner 5.49
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32. Following is the Balance Sheet of A and B (who share profits in the ratio of 3 : 2) as at
31st March, 2018:
Liabilities ` Assets `
Sundry Creditors 15,000 Building 18,000
Capital A/cs: Machinery 15,000
A 20,000 Stock 12,000
B 25,000 45,000 Debtors 10,000
Bank 5,000
60,000 60,000

On 1st April, 2018, C was admitted on the following terms:
(a) C is to pay ` 25,000 as his capital and ` 10,000 as his share of goodwill for 1/5th share of profits.
(b) The new profit-sharing ratio will be 5 : 3 : 2.
(c) The assets are to be revalued as Building ` 25,000; Machinery ` 12,000; Stock ` 12,000; Debtors
(because of doubtful debts) ` 9,500.
(d) It was found that there was a liability for ` 1,500 for goods received but not recorded in books.
Give Journal entries to record the above. Also, give the Ledger Accounts and Balance Sheet after C’s
admission. [Ans.: Gain (Profit) on Revaluation—` 2,000; Capital A/cs: A—` 26,200; B—` 30,800;
C—` 25,000; Bank Balance—` 40,000; Balance Sheet Total—` 98,500.]
33. X and Y are partners sharing profits and losses in the ratio of 5 : 3. Their Balance Sheet as at 31st March,
2018 is:
Liabilities ` Assets `
Capital A/cs: Furniture 40,000
X 40,000 Patents 10,000
Y 50,000 90,000 Sundry Debtors 44,000
General Reserve 14,000 Less: Provision for Doubtful Debts 5,000 39,000
Sundry Creditors 30,000 Stock 20,000
Cash at Bank 22,000
Cash in Hand 3,000
1,34,000 1,34,000

On 1st April, 2018, they take Z into the partnership on the following terms:
(a) Z brings in ` 25,000 as his capital but cannot bring in ` 3,600 as his share of goodwill.
(b) Patents are written off from the books.
(c) General Reserve will appear in the books of the new firm at its original value.
(d) A Provision for Doubtful Debts is to be maintained @ 5% on Sundry Debtors.
(e) The new profit-sharing ratio of X, Y and Z is 2 : 4 : 1.
You are required to show Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the
new firm. [Ans.: Loss on Revaluation—` 7,200; Partners’ Capital A/cs: X—` 48,800; Y— ` 39,600;
Z—` 23,000; Balance Sheet Total—` 1,55,400; Goodwill adjustment:
Dr. Y’s Captial A/c by ` 4,950 and Z’s Current A/c by ` 3,600; Cr. X’s Captial A/c by ` 8,550.]