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M.180 An Aid to Accountancy—CBSE XII

16. Raghu and Rishu are partners sharing profits and losses in the ratio 3 : 2. Their Balance
Sheet as at 31st March, 2018 was as follows:

BALANCE SHEET OF RAGHU AND RISHU as at 31st March, 2018
Liabilities ` Assets `

Creditors 86,000 Cash in Hand 2,000
Employees’ Provident Fund 10,000 Cash at Bank 75,000
Investments Fluctuation Reserve 4,000 Debtors 42,000
Capital A/cs: Less: Provision for Doubtful Debts 7,000 35,000
Raghu 1,19,000 Investments 21,000
Rishu 1,12,000 2,31,000 Building 98,000
Plant and Machinery 1,00,000
3,31,000 3,31,000
Rishabh was admitted on that date for 1/4th share of profit on the following terms:
(i) Rishabh will bring ` 50,000 as his share of capital.
(ii) Goodwill of the firm is valued at ` 42,000 and Rishabh will bring his share of
Goodwill in cash.

(iii) Building was appreciated by 20%.
(iv) All Debtors were good.
(v) There was a liability of ` 10,800 included in Creditors which has ceased to exist.
(vi) Expenses on revaluation amount to ` 7,400 and are paid by Raghu.
(vii) New profit-sharing ratio will be 2 : 1 : 1.
(viii) Capital of Raghu and Rishu will be adjusted on the basis of Rishabh’s share of
capital and any excess or deficiency will be made by withdrawing or bringing in
cash by the partners as the case may be.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of
the new firm.

Or
Following is the Balance Sheet of Kusum, Sneh and Usha as at 31st March, 2018, who
have agreed to share profits and losses in proportion of their capitals:
BALANCE SHEET OF KUSUM, SNEH AND USHA as at 31st March, 2018
Liabilities ` Assets `

Capital A/cs: Land and Building 4,00,000
Kusum 4,00,000 Machinery 6,00,000
Sneh 6,00,000 Closing Stock 2,00,000
Usha 4,00,000 14,00,000 Sundry Debtors 2,20,000
Employees’ Provident Fund 70,000 Less: Provision for Doubtful Debts 20,000 2,00,000
Workmen Compensation Reserve 30,000 Cash at Bank 2,00,000
Sundry Creditors 1,00,000
16,00,000 16,00,000