CBSE 2025, Compartment, Set 1

Question

Karan and Arjun were partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March, 2024, their Balance Sheet was as follows: | Liabilities | Amount (₹) | Assets | Amount (₹) | |---|---|---|---| | Capitals: | | Machinery | 4,00,000 | | Karan 5,00,000 | | Furniture | 2,00,000 | | Arjun 5,00,000 | 10,00,000 | Debtors 4,00,000
Less: Prov. 50k | 3,50,000 | | General Reserve | 1,50,000 | Stock | 1,50,000 | | Workmen's Comp. Fund | 1,50,000 | Cash | 2,00,000 | | **Total** | **13,00,000** | **Total** | **13,00,000** | On 1st April, 2024, Nakul was admitted into the partnership for $\frac{1}{4}^{th}$ share in the profits of the firm on the following terms: (i) Nakul brought ₹4,00,000 as his capital and his share of goodwill premium in cash. Goodwill of the firm was valued at ₹2,00,000. (ii) Furniture was valued at ₹2,50,000. (iii) A provision for doubtful debts @ 10% is to be maintained on debtors. (iv) The liability against Workmen's Compensation Fund was estimated at ₹1,20,000. (v) After the above adjustments, the capitals of Karan and Arjun were to be adjusted taking Nakul's capital as the base. Excess or shortage in the capital accounts of Karan and Arjun was to be adjusted by opening current accounts. Prepare Revaluation Account and Partners' Capital Accounts.

Edvaya · Accepted Answer

The correct answer is Subjective. **1. Revaluation Account** | Particulars | Amount (₹) | Particulars | Amount (₹) | |---|---|---|---| | To Profit transferred to: | | By Furniture A/c | 50,000 | | Karan's Capital A/c (3/5) : 36,000 | | By Provision for doubtful debts A/c | 10,000 | | Arjun's Capital A/c (2/5) : 24,000 | 60,000 | | | | **Total** | **60,000** | **Total** | **60,000** | **2. Partners' Capital Accounts** | Particulars | Karan (₹) | Arjun (₹) | Nakul (₹) | Particulars | Karan (₹) | Arjun (₹) | Nakul (₹) | |---|---|---|---|---|---|---|---| | To Arjun's Current A/c | - | 1,36,000 | - | By Balance b/d | 5,00,000 | 5,00,000 | - | | To Balance c/d (New) | 7,20,000 | 4,80,000 | 4,00,000 | By Cash A/c | - | - | 4,00,000 | | | | | | By Premium for GW | 30,000 | 20,000 | - | | | | | | By W.C. Reserve | 18,000 | 12,000 | - | | | | | | By Revaluation A/c | 36,000 | 24,000 | - | | | | | | By General Reserve | 90,000 | 60,000 | - | | | | | | By Karan's Current A/c | 46,000 | - | - | | **Total** | **7,20,000**| **6,16,000**| **4,00,000** | **Total** | **7,20,000**| **6,16,000**| **4,00,000** | **Working Notes:** 1. **Revaluation:** Furniture increase = ₹50,000. Provision required = 10% of 4,00,000 = 40,000. Existing = 50,000. Decrease in provision (gain) = ₹10,000. 2. **Goodwill:** Nakul's share = $2,00,000 	imes 1/4 = ₹50,000$. Distributed in 3:2 ratio. 3. **Workmen Comp:** Fund (1.5L) - Liab (1.2L) = 30k distributed in 3:2. 4. **Capital Adjustment:** Total Capital = $4,00,000 	imes 4/1 = ₹16,00,000$. Remaining share = 3/4. Karan = $3/4 	imes 3/5 	imes 16L = ₹7,20,000$. Arjun = $3/4 	imes 2/5 	imes 16L = ₹4,80,000$. Karan's present capital = $5L + 30k + 18k + 36k + 90k = 6,74,000$. Shortfall = $7,20,000 - 6,74,000 = ₹46,000$ (Debit Current A/c). Arjun's present capital = $5L + 20k + 12k + 24k + 60k = 6,16,000$. Excess = $6,16,000 - 4,80,000 = ₹1,36,000$ (Credit Current A/c).

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Accountancy > Accounting For Partnership Firms > Admission Of A Partner

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Liabilities	Amount (₹)	Assets	Amount (₹)
Capitals:		Machinery	4,00,000
Karan 5,00,000		Furniture	2,00,000
Arjun 5,00,000	10,00,000	Debtors 4,00,000 Less: Prov. 50k	3,50,000
General Reserve	1,50,000	Stock	1,50,000
Workmen's Comp. Fund	1,50,000	Cash	2,00,000
Total	13,00,000	Total	13,00,000