Practical Problem 01
Practical Problems | Q 1 | Page 161Vikram and Pradnya share profits and losses in the ratio 2:3 respectively. | ||||
Their balance sheet as on 31st March 2018 was as under. | ||||
Balance Sheet as on 31st March,2018 . | ||||
Liabilities | Rs | Asset | Rs | |
Creditors | 1,05,000 | Cash | 7,500 | |
Capitals : | Land & Building | 37,500 | ||
Vikram | 75,000 | Plant | 45,000 | |
Pradnya | 75,000 | Furniture | 3,000 | |
Stock | 75,000 | |||
Debtors | 87,000 | |||
2,55,000 |
| 2,55,000 | ||
They agreed to admit Avani as a partner on 1st April 2018 on the following terms: | ||||
1 Avani shall have 1/4th share in future profits. | ||||
2. He shall bring ` 37,500 as his capital and ` 30,000 as his share of goodwill. | ||||
3. Land and building to be valued at ` 45,000 and furniture to be depreciated by 10%. | ||||
5. Provision for bad and doubtful debts is to be maintained at 5% on the Sundry Debtors. | ||||
6. Stocks to be valued ` 82, 500. | ||||
The capital A/c of all partners to be adjusted in their new profit and loss ratio and excess | ||||
Prepare Profit and Loss Adjustment Account, Capital Accounts and New Balance Sheet | ||||
IN THE BOOKS OF NEW FIRM | |||||
Dr Profit and Loss Adjustment Account Cr | |||||
Particular | Amt | Amt | Particular | Amt | Amt |
To Furniture | 300 | By Land and Building | 7,500 | ||
To Debtor | 4,350 | By Stock | 7,500 | ||
To Profit on Revaluation | |||||
Vikram Capital A/c | 4,140 | ||||
Pradnya Capital A/c | 6,210 | 10,350 | |||
15,000 | 15,000 | ||||
Dr Partner’s Capital Account Cr | |||||||
Particular | Vikram | Pradnya | Avani | Particular | Vikram | Pradnya | Avani |
By bal b/d | 75,000 | 75,000 | |||||
By Cash | 37,500 | ||||||
To Loan A/c | 46,140 | 31,170 | By Goodwill A/c | 12,000 | 18,000 | ||
To bal c/d | 45,000 | 67,500 | 37,500 | By P & L Adj A/c | 4,140 | 6,210 | |
91,140 | 99,210 | 37,500 | 91,140 | 99,210 | 37,500 | ||
Balance sheet of New Firm as on 1st April 2018 | |||||
Liabilities | Amt | Amt | Asset | Amt | Amt |
Capital A/c | Land and building | 37,500 | |||
Vikran | 45,000 | Add: Appreciation | 7,500 | 45,000 | |
Pradnya | 67,500 | Plant | 45,000 | ||
Avani | 37,500 | 1,50,000 | Furniture | 3,000 | |
Less: Depreciation | -300 | 2,700 | |||
Creditors | 1,05,000 | stock | 75,000 | ||
Add: Appreciation | 7,500 | 82,500 | |||
Loan A/c | Debtor | 87,000 | |||
Vikran | 46,140 | Less: R.D.D@ 5% | -4350 | 82,650 | |
Pradnya | 31,710 | 77,850 | Cash | 75,000 | |
3,32,850 | 3,32,850 | ||||
Working
Dr Cash A/c Cr | |||||
Particular | Amt | Amt | Particular | Amt | Amt |
To bal b/d | 7500 | ||||
To Avani Capital A/c | 37,500 | ||||
To Goodwill A/c | 30,000 | By Bal c/d | 75,000 | ||
75,000 | 75,000 | ||||
Dr Goodwill A/c Cr | |||||
Particular | Amt | Amt | Particular | Amt | Amt |
To Vikram Capital A/c | 12,000 | By Cash A/c | 30,000 | ||
To Pradnya Capital A/c | 18,000 | 30,000 | |||
30,000 | 30,000 | ||||
OlD Ratio = 2 : 3 |
New Partner Share 1/4th |
Balance of One = 1 – New Partner Share |
= 1 – 1/4th |
= 3/4th |
New Ratio = Old Ratio X Balance of 1 |
Vikram = 2/5 x 3/4 = 6/20 |
Pradnya = 3/5 x 3/4 = 9/20 |
Avani = 1/4 x 5/5 = 5/20 (Making Denominator Equal) |
New Ratio : 6 : 9 : 5 |