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M.428 An Aid to Accountancy—CBSE XII

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Aruna Karuna Varuna Particulars Aruna Karuna Varuna
` ` ` ` ` `
To Revaluation A/c (Loss) 2,000 3,000 2,000 By Balance b/d 2,00,000 3,00,000 2,00,000
To Aruna’s Capital A/c ... 20,000 20,000 By General Reserve A/c 10,000 15,000 10,000
To Bank A/c 50,000 ... ... By Workmen Compen-
To Aruna’s Loan A/c 2,00,000 ... ... sation Reserve A/c 2,000 3,000 2,000
To Balance c/d (WN 3) ... 4,00,000 3,00,000 By Karuna’s Capital A/c 20,000 ... ...
(Goodwill) (WN 2)
By Varuna’s Capital A/c 20,000 ... ...
(Goodwill) (WN 2)
By Bank A/c (Bal. Fig.) ... 1,05,000 1,10,000
2,52,000 4,23,000 3,22,000 2,52,000 4,23,000 3,22,000

BALANCE SHEET
(After Aruna’s Retirement)
as at 31st March, 2018
Liabilities ` Assets `
Aruna’s Loan A/c 2,00,000 Land and Building 2,60,000
Outstanding Rent 25,000 Machinery 2,40,000
Workmen Compensation Claim 8,000 Stock 1,25,000
Sundry Creditors 50,000 Sundry Debtors (` 1,10,000 – ` 17,000) 93,000
Capital A/cs: Cash at Bank (WN 4) 2,65,000
Karuna 4,00,000
Varuna 3,00,000 7,00,000
9,83,000 9,83,000

Working Notes:
1. Accounting Entries for Bad Debts:
Date Particulars L.F. Dr. (`) Cr. (`)

Bad Debts A/c ...Dr. 17,000
To Sundry Debtors A/c 17,000
Provision for Doubtful Debts A/c ...Dr. 10,000
Revaluation A/c ...Dr. 7,000
To Bad Debts A/c 17,000
2. Adjustment of Goodwill:
2
(i) Aruna’s Share of Goodwill = ` 1,40,000 × = ` 40,000, which is contributed by Karuna and Varuna in their
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gaining ratio. It is calculated as follows:

4 3 1 3 2 1
Karuna’s Gain = - = ; Varuna’s Gain = - =
7 7 7 7 7 7
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Thus, Gaining Ratio of Karuna and Varuna = : or 1 : 1.
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1
(ii) Karuna’s contribution for Aruna’s Goodwill = ` 40,000 × = ` 20,000
2
1
Varuna’s contribution for Aruna’s Goodwill = ` 40,000 × = ` 20,000.
2