Practical Problem 05

Practical Problems | Q 5 | Page 185

Shah, Lodha and Dhole were partners sharing profits and losses in the ratio of 4:3:3.

Their Balance Sheet as on 31st March 2019 is a given below.

Balance Sheet as on 31^st March 2019

Liabilities

Amt

Assets

Amt

Sundry Creditors

20,000

Cash

9,000

Bills payable

4,000

Sundry Debtors

10,000

Capital Account:

Less: R.D.D.

1,000

9,000

Shah

45,000

Furniture

25,000

Lodha

35,000

Computers

43,000

Dhole

27,000

Vehicles

45,000

1,31,000

On 1^st April 2019, Mr. Lodha retired form the firm on the following terms.

1. Goodwill is to be valued at an average Profits and Losses of the last five years which were as follows.
YEARS	Profit/Loss
2015	Rs 35,000
2016	Rs 20,000
2017	Rs 30,000
2018	Rs 20,000
2019	Rs 25,000
2. Computers to be depreciated by 10%
3.Furniture to be revalued at Rs 27,500
4. Vehicles appreciated by 20%
5. R.D.D. was no longer necessary
6. Shah and Dhole will share the future profits and losses in the ratio of 2:1
7. It was decided that goodwill should not appear in the books of a new firm and amount payable to Lodha is to be transferred to his Loan A/c
Prepare : Profit AND Loss ADJUSTMENT A/c , PARTNERS CAPITAL ACCOUNTS, BALANCE sheet of new firm,

IN THE BOOKS OF Partnership Firm
Dr Profit and Loss Adjustment Account Cr
Particular	Amt	Amt	Particular	Amt	Amt
To Computer		4,300	By Furniture		2,500
			By Vehicles		9,000
To Pratner’s Capital A/c (Profit)			By R.D.D		1,000
Shah A/c	3,280
Lodha A/c	2,460
Dhole A/c	2,460	8,200
		11,500			11,500

Dr Partner Capital A/c Cr
Particular	Shah	Lodha	Dhole	Particular	Shah	Lodha	Dhole
To Goodwill A/c	17,333		8,667	By Balance b/d	45,000	35,000	27,000
To Lodha Loan A/c		45260		By Goodwill A/c	10,400	7,800	7,800
To Balance C/d	41,347		28,593	By Profit & loss Adj A/c	3,280	2,460	2,460
	58,680	45,260	37,260		58,680	45,260	37,260

Balance sheet of New Firm as on 1st April 2019

Liabilities

Amt

Asset

Amt

Capital A/c

Furniture

25,000

Shah

41,347

Add : Appreciation

2,500

27,500

Dhole

28,593

69,940

Computers

43,000

Sundry Creditors

20,000

Less : Depreciation @ 10%

-4,300

38,700

Bills payable

4,000

Vehicles

45,000

Lodha’s Loan

45,260

Add : Appreciation @ 20%

9,000

54,000

Sundry Debtors

10,000

Cash

9,000

1,39,200

Dr Profit and Loss Adjustment Account Cr

Particular

Amt

Particular

Amt

To Computer

4,300

By Furniture

2,500

By Vehicles

9,000

To Partner Capital A/c (Profit)

By R.D.D

1,000

Shah A/c

3,280

Lodha A/c

2,460

Dhole A/c

2,460

8,200

11,500

Practical Problem 05

Practical Problems | Q 5 | Page 185

IN THE BOOKS OF Partnership Firm

Dr Profit and Loss Adjustment Account Cr

Particular

Amt

Amt

Particular

Amt

Amt

To Computer

4,300

By Furniture

2,500

By Vehicles

9,000

To Pratner’s Capital A/c (Profit)

By R.D.D

1,000

Shah A/c

3,280

Lodha A/c

2,460

Dhole A/c

2,460

8,200

11,500

11,500

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