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Model Test Papers M.141

16.

Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `
To Stock A/c 4,500 By Land and Building A/c 4,000
To Provision for Doubtful Debts A/c 1,500 By Creditors A/c 1,000
To Plant and Machinery A/c 2,000 By Cash A/c 15,000
To Cash A/c 15,000 By Loss transferred to:
P’s Capital A/c 1,875
Q’s Capital A/c 1,125 3,000
23,000 23,000

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars P (`) Q (`) R (`) Particulars P (`) Q (`) R (`)

To P’s Capital A/c ... ... 15,000 By Balance b/d 2,00,000 1,50,000 ...
To Q’s Capital A/c ... ... 15,000 By Cash A/c ... ... 1,00,000
To Revaluation A/c 1,875 1,125 ... By R’s Capital A/c 15,000 15,000 ...
To Balance c/d 2,23,125 1,69,875 70,000 By General Reserve A/c 10,000 6,000 ...
2,25,000 1,71,000 1,00,000 2,25,000 1,71,000 1,00,000

Dr. CASH ACCOUNT Cr.
Particulars ` Particulars `

To Balance b/d 15,000 By Revaluation A/c 15,000
To Revaluation A/c 15,000 By Balance c/d 1,15,000
To R’s Capital A/c 1,00,000
1,30,000 1,30,000

BALANCE SHEET as at 1st April, 2018
Liabilities ` Assets `

Creditors 38,000 Cash 1,15,000
Bills Payable 5,000 Stock 40,500
Capital A/cs: Debtors 49,000
P 2,23,125 Less: Provision for Doubtful Debts 2,500 46,500
Q 1,69,875 Plant and Machinery 1,00,000
R 70,000 4,63,000 Land and Building 2,04,000
5,06,000 5,06,000

Working Notes:
1. Calculation of Sacrificing Ratio: Sacrifice = Old Share – New Share
5 2 1 3 1 1
P’s Sacrifice = - = ; Q’s Sacrifice = - = ; Hence, Sacrificing Ratio = 1 : 1.
8 4 8 8 4 8
2. Adjustment of Goodwill:
1
R’s Share of Goodwill = of ` 1,20,000 = ` 30,000, which will be credited to P and Q in their Sacrificing Ratio,
i.e., 1 : 1. 4