A and B were partners in a firm sharing profits and losses in the ratio of 3: 1. On 31.03.2022, their Balance Sheet was as follows:

Balance Sheet of A and B as at 31st March, 2022

Liabilities Amount
Assets Amount
Outstanding Expenses 3,000 Bank 40,000
Bills Payable 20,000 Stock 60,000
Sundry Creditors 1,40,000 Bills Receivables 70,000
General Reserve 80,000 Debtors       1,00,000
Capitals: Less: Provision for
Doubtful debts      5,000

95,000
A       2,00,000 Furniture 85,000
B       3,00,000 5,00,000 Machinery 1,10,000
Land and Building 2,83,000
7,43,000 7,43,000

On the above date, C was admitted as a new partner for 1/5th share in the profits on the following terms:

  1. C will bring 2,00,000 as her capital and 1,60,000 as her share of goodwill premium.
  2. Stock will be appreciated by 1,500.
  3. Debtors of 5,000 will be written off as bad debts and a provision of 10% for bad and doubtful debts will be maintained.

Prepare Revaluation Account and Partners’ Capital Accounts.

Marks-6, CBSE:2022-23/Compartment/Q-26*

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