# Practical Problem 08

##### Practical Problems | Q 8 | Page 165
 The Balance Sheet of Sahil and Nikhil who share profits in the ratio of 3:2 as on 31st March, 2017 Balance Sheet as on 31st March,2018 . Liabilities Rs Rs Asset Rs Rs Creditors 60,000 Furniture 60,000 Capitals: Building 72,000 Sahil 80,000 Debtors 40,000 Nikhil 1,00,000 1,80,000 Closing Stock 48,000 Cash in Hand 20,000 2,40,000 2,40,000 Varad admitted on 1St April 2017 on the following terms : 1. Varad was to pay 1,00,000 for his share of capital. 2. He was also to pay 40,000 as his share of goodwill. 3. The new profit sharing ratio was 3:2:3 4. Old partners decided to revalue the assets as follows: Building 1,00,000, Furniture- 48,000, Debtors – 38,000 (in view of likely bad debts) 5. It was found that there was a liability for 3,000 for goods in March 2017 but recorded on 2nd April 2017 . You are required to prepare :a) Profit and Loss adjustment accounts,b) Capital accounts of the partnersc) Balance sheet after the admission of Varad.
 IN THE BOOKS OF NEW FIRM Dr                                                                                                           Profit and Loss Adjustment Account                                                                                                         Cr Particular Amount Amount Particular Amount Amount To Furniture A/c 12,000 By Building A/c 28,000 To Debtors 2,000 To Unrecorded Liability 3,000 To Profit on Revaluation A/c Sahil Capital A/c 6600 Nikhil Capital A/c 4400 11,000 28,000 28,000
 Dr                                                                                                                Partners Capital A/c                                                                                                                          Cr Particular Sahil Nikhil Varad Particular Sahil Nikhil Varad By Bal b/d 80,000 1,00,000 By Cash A/c 1,00,000 To Bal c/d 1,10,600 1,20,400 1,00,000 By Goodwill A/c 24,000 16,000 By Profit & Loss Adj A/c 6,600 4,400 1,10,600 1,20,400 1,00,000 1,10,600 1,20,400 1,00,000
 Balance sheet of New Firm as on 1st April 2017 Liabilities Amount Amount Asset Amount Amount Creditors 60,000 Furniture 60,000 Unrecorded Liability 3,000 Less: Depreciation 12,000 48,000 Capital A/c Building 72,000 Sahil A/c 1,10,600 Add: Appreciation 28,000 1,00,000 Nikhil A/c 1,20,400 Debtors 40,000 Varad A/c 1,00,000 3,31,000 Less: RDD 2,000 38,000 Closing Stock 48,000 Cash A/c 1,60,000 3,94,000 3,94,000
 Dr                                                                                                                                                 Cash A/c                                                                                                                           Cr Particular Amount Amount Particular Amount Amount To Bal b/d 20,000 To Vardha Capital A/c 1,00,000 To Goodwill A/c 40,000 By Bal c/d 1,60,000 1,60,000 1,60,000
 Dr                                                                                                                                           Goodwill A/c                                                                                                                  Cr Particular Amount Amount Particular Amount Amount To Sahil Capital 24,000 By Cash A/c 40,000 To Nikhil Capital 16,000 40,000 40,000 40,000