Page 351 - AAAXII

Model Test Papers M.335

Or
Surjit and Rani were partners in a firm sharing profits in the ratio of 3 : 2. On
31st March, 2018 their Balance Sheet was as follows:

Liabilities ` Assets `
Creditors 50,000 Goodwill 80,000
Workmen Compensation Reserve 80,000 Building 80,000
Capital A/cs: Stock 60,000
Surjit 80,000 Debtors 40,000
Rani 70,000 1,50,000 Bank 20,000
2,80,000 2,80,000
The firm was dissolved on 1st April, 2018 and the Assets and Liabilities were settled
as follows:
(a) Creditors agreed to take building in liew of their claims.
(b) Stock was taken by Rani at ` 50,000 for cash.
(c) Debts of ` 5,000 proved bad.
(d) Goodwill could not be sold.
(e) Workmen compensation claim was ` 80,000.
Pass Journal entries for dissolution of firm. (6)
16. Ram and Mohan were partners in a firm sharing profits in the ratio of 3 : 2. They
admitted Sohan as a new partner for 1/3rd share in the profits. Sohan is to bring
` 30,000 for goodwill and such an amount as his capital, so that his capital will be
equal to 1/3rd of the total capital of the new firm. On 31st March, 2018, the Balance
Sheet of Ram and Mohan was as follows:
Liabilities ` Assets `
Creditors 30,000 Cash 1,00,000
Bills Payable 10,000 Debtors 30,000
Workmen Compensation Reserve 10,000 Stock 50,000
General Reserve 30,000 10% Government Bonds 20,000
Capital A/cs: Furniture 10,000
Ram 1,35,000 Machinery 1,20,000
Mohan 1,25,000 2,60,000 Goodwill 10,000
3,40,000 3,40,000

Following adjustments need to be made:
(a) Stock is overvalued by ` 5,000.
(b) Reduce furniture by 10% and machinery by 5%.
(c) Make provision of ` 3,000 on debtors for doubtful debts.
(d) A debtor whose dues of ` 5,000 were written off as bad debts last year, paid
` 4,000 in full.
(e) Revaluation Expenses amounting to ` 4,000 are paid by firm.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the
new firm.