Rajinder and Vijay were partners in a firm sharing profits in the ratio 3:2. On 31st March 2023 their balance sheet was as follows:
| Liabilities | Amount ₹ |
Assets | Amount ₹ |
|---|---|---|---|
| Capital Accounts: | Fixed Assets (Tangible) | 3,60,000 | |
| Rajinder 3,00,000 | Goodwill | 50,000 | |
| Vijay 1,50,000 | 4,50,000 | Investments | 40,000 |
| Current Accounts: | Stock | 74,000 | |
| Rajinder 50,000 | Debtors 1,00,000 | ||
| Vijay 10,000 | 60,000 | Less: Provision for Doubtful Debts 4,000 |
96,000 |
| Creditors | 75,000 | Bank | 25,000 |
| General Reserve | 60,000 | ||
| 6,45,000 | 6,45,000 |
With an aim to expand business it is decided to admit Ranvijay as a partner on 1st April 2023 on the following terms:
a) Provision for doubtful debts is to be increased to 6% of debtors.
b) An outstanding bill for repairs ₹50,000 to be accounted in the books
c) An unaccounted interest accrued of ₹7,500 be provided for.
d) Investment were sold at book value.
e) Half of stock was taken by Rajinder at ₹42,000 and remaining stock was also to be revalued at the same rate.
f) New profit-sharing ratio of partners will be 5:3:2.
g) Ranvijay will bring ₹1,00,000 as capital and his share of goodwill which was valued at twice the average profit of the last three years ended 31st March 2023, 2022 and 2021 were ₹1,50,000, ₹1,30,000 and ₹1,70,000 respectively.
Pass necessary journal entries
Marks-6, CBSE:2023-24/Sample/Q-24*
Answer :