CBSE 2015, Set 1

Question

Om, Ram and Shanti were partners sharing profits in the ratio of 3 : 2 : 1. On 1st April 2014, Hanuman was admitted on the following terms:
(i) He will bring Rs 1,00,000 for capital and get 1/10th share in profits.
(ii) Goodwill of the firm valued at Rs 3,00,000; Hanuman to bring necessary premium in cash.
(iii) Liability of Rs 18,000 created against bills receivables discounted.
(iv) Stock and furniture reduced by 20%.
(v) Land and Building increased by 10%.
(vi) Capitals adjusted on basis of Hanuman's capital in profit sharing ratio by opening current accounts.

Balance Sheet (1.4.2014): Om Capital Rs 3,58,000; Ram Rs 3,00,000; Shanti Rs 2,62,000; General Reserve Rs 48,000; Creditors Rs 1,60,000; Bills Payable Rs 90,000. Assets: Land & Building Rs 3,64,000; Plant & Machinery Rs 2,95,000; Furniture Rs 2,33,000; Bills Receivable Rs 38,000; Debtors Rs 90,000; Stock Rs 1,11,000; Bank Rs 87,000.

Prepare Revaluation Account and Partners' Capital Accounts.

Edvaya · Accepted Answer

The correct answer is Subjective. **Revaluation Account** | Dr. | Rs | Cr. | Rs | |---|---|---|---| | Stock (20% of 1,11,000) | 22,200 | Land & Building (10% of 3,64,000) | 36,400 | | Furniture (20% of 2,33,000) | 46,600 | | | | Bills Receivable (liability created) | 18,000 | | | | **Net Loss — transferred:** | | | | | Om (3/6) | 25,200 | | | | Ram (2/6) | 16,800 | | | | Shanti (1/6) | 8,400 | | | | **Total** | **86,800** + 50,400 loss... | **Total** | **86,800** | *(Loss = 22,200 + 46,600 + 18,000 − 36,400 = Rs 50,400; distributed 3:2:1)* **New Profit Sharing Ratio:** Remaining 9/10 shared in old ratio 3:2:1 → Om: 27/60, Ram: 18/60, Shanti: 9/60, Hanuman: 6/60 → **9 : 6 : 3 : 2** **Goodwill:** Hanuman's share = Rs 3,00,000 × 1/10 = Rs 30,000 Sacrificing ratio = 3:2:1; Om gets Rs 15,000; Ram Rs 10,000; Shanti Rs 5,000 **Adjusted Capital for Om, Ram, Shanti, Hanuman (ratio 9:6:3:2):** Total capital = Hanuman's capital × 20/2 = 1,00,000 × 10 = Rs 10,00,000 Om: 9/20 × 10,00,000 = Rs 4,50,000 Ram: 6/20 × 10,00,000 = Rs 3,00,000 Shanti: 3/20 × 10,00,000 = Rs 1,50,000 **Partners' Capital Accounts (summary):** | | Om (Rs) | Ram (Rs) | Shanti (Rs) | Hanuman (Rs) | |---|---|---|---|---| | Balance b/d | 3,58,000 | 3,00,000 | 2,62,000 | — | | General Reserve | 24,000 | 16,000 | 8,000 | — | | Goodwill (premium) | 15,000 | 10,000 | 5,000 | — | | Cash (Hanuman) | — | — | — | 1,00,000 | | Revaluation Loss | (25,200) | (16,800) | (8,400) | — | | Adjusted balance | 3,71,800 | 3,09,200 | 2,66,600 | 1,00,000 | | Required capital | 4,50,000 | 3,00,000 | 1,50,000 | 1,00,000 | | Current A/c (diff.) | Om Cr. 78,200 | Ram Dr. 9,200 | Shanti Dr. 1,16,600 | — |

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Accountancy > Accounting For Partnership Firms > Admission Of A Partner

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