Practical Problem 09

Practical Problems | Q 9 | Page 166

Mr. Amit and Baban 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

Amt

Asset

Amt

 

Creditors

1,40,000

Cash 

1,10,000

 

Capital : 

 

Land and Building

50,000

 

Amit 

1,00,000

Plant 

60,000

 

Baban

1,00,000

Furniture

4,000

 
  

Stock

1,00,000

 
  

Debtors

16,000

 
 

3,40,000

 

3,40,000

 

They agreed decided to admit Kamal on 1st April 2018 on following terms:

1. Kamal shall have 1/4th share in future profits.

2. They agreed to admit Kamal as a partner on 1st April 2018 on the following terms:

3. She shall bring 50,000 as her capital and 40,000 as her share of goodwill.

4. Land and building to be valued at 60,000 and furniture to be depreciated by 10%

5. Provision for bad and doubtful debts is tobe maintained at 5% on the sundry debtors.

6. Stocks to be valued 1,10,000

The capital A/c of all partners to be adjusted in their new profit and loss ratio and

excess amount be transferred to their loan accounts.

Prepare profit and loss adjustment A/c, Capital A/cs, and New Balance Sheet

                                                                                             IN THE BOOKS OF NEW FIRM

Dr                                                                                                                 Profit and Loss Adjustment Account                                                                                                                Cr

Particular

Amount

Amount

Particular

Amount

Amount

To Furniture

 

400

BY Land & Building

 

10,000

To Debtors

 

800

By Stock A/c

 

10,000

To Profit on Revaluation

     

Amit Capital A/c

7,520

    

Baban capital A/c

11,280

18,800

   
  

20,000

  

20,000

Dr                                                                                                                                                 Partner Capital A/c                                                                                                            Cr

Particular

Amit

Baban

Kamal

Particular

Amit

Baban

Kamal

    

By Bal b/d

1,00,000

1,00,000

 

To Loan A/c

63,520

45,280

 

By Cash A/c

  

50,000

To Bal c/d

60,000

90,000

50,000

By Goodwill A/c

16,000

24,000

 
    

By P & L Adj A/c

7,520

11,280

 
 

1,23,520

1,35,280

50,000

 

1,23,520

1,35,280

50,000

                                                                                                            Balance sheet of New Firm as on 1st April 2018.

Liabilities

Amount

Amount

Asset

Amount

Amount

Capital A/c

  

Land and Building

50,000

 

Amit

60,000

 

Add: Appreciation

10,000

60,000

Bban

90,000

 

Plant 

 

60,000

Kamal

50,000

2,00,000

Furniture

4,000

 

Creditors

 

1,40,000

Less: Dep @ 10%

-400

3,600

Amit Loan

 

63,520

Stock

1,00,000

 

Baban Loan

 

45,280

Add: Appreciation

10,000

1,10,000

   

Debtors

16,000

 
   

Less: RDD @ 5%

-800

15,200

   

Cash

 

2,00,000

  

4,48,800

  

4,48,800

Working:

Dr                                                                                                                                      Cash A/c                                                                                                                   Cr

Particular

Amount

Amount

Particular

Amount

Amount

To Bal b/d

 

1,10,000

   

To Kamal Capital A/c

 

50,000

By Bal c/d

 

2,00,000

To Goodwill A/c

 

40,000

   
  

2,00,000

  

2,00,000

Dr                                                                                                                                                Goodwill A/c                                                                                                                                  Cr

Particular

Amount

Amount

Particular

Amount

Amount

 

To Amit Capital A/c

16,000

 

By Cash

 

40,000

 

To Baban Capital A/c

24,000

40,000

    
       
  

40,000

  

40,000