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Model Test Papers M.95

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars A B C Particulars A B C
` ` ` ` ` `
To Goodwill A/c 30,000 10,000 ... By Balance b/d 50,000 80,000 ...
To B’s Current A/c ... 43,150 ... By Revaluation A/c 12,450 4,150 ...
(Balancing Figure) By Workmen Compensation
To Balance c/d (WN 1 & 2) 1,35,000 45,000 60,000 Reserve A/c 30,000 10,000 ...
By General Reserve A/c 7,500 2,500 ...
By C’s Current A/c 4,500 1,500 ...
(Goodwill)
By Cash A/c ... ... 60,000
By A’s Current A/c (Bal. Fig.) 60,550 ... ...
1,65,000 98,150 60,000 1,65,000 98,150 60,000

BALANCE SHEET OF THE NEW FIRM as at 1st April, 2018
Liabilities ` Assets `

Sundry Creditors (` 70,000 – ` 1,200) 68,800 Land and Building (` 40,000 + ` 25,000) 65,000
B’s Current A/c 43,150 Plant and Machinery (` 70,000 – ` 10,000) 60,000
Capital A/cs: Investments 26,000
A 1,35,000 Stock 30,000
B 45,000 Debtors 35,000
C 60,000 2,40,000 Less: Provision for Doubtful Debts 600 34,400
Cash (` 10,000 + ` 60,000) 70,000
A’s Current A/c 60,550
C’s Current A/c 6,000
3,51,950 3,51,950

Working Notes:
1. Calculation of New Profit-sharing Ratio:
Let the Total Profit = 1
C’s Share = 1/4
1 3
Remaining Share = -1 =
4 4
3 3 9
A’s New Share = ¥ =
4 4 16
3 1 3
B’s New Share = ¥ =
4 4 16
9 3 1
Thus, New Profit-sharing Ratio of A, B and C = : : or 9 : 3: 4.
16 16 4
2. Calculation of A’s Capital and B’s Capital on the Basis of C’s Capital:
1
C’s Share of Profit = ; C’s Capital = ` 60,000
4
4
Total Capital of the firm on the basis of C’s Capital = ` 60,000 × = ` 2,40,000
1
9
A’s Capital in the New Firm = ` 2,40,000 × = ` 1,35,000
16
3
B’s Capital in the New Firm = ` 2,40,000 × = ` 45,000
16
C’s Capital in the New Firm = ` 60,000.