X and Y were partners in the profit-sharing ratio of 3: 2. Their balance sheet as at March 31, 2022 was as follows:

Balance Sheet as at March 31, 2022

Liabilities Amount
Assets Amount
Creditors 56,000 Plant and Machinery 70,000
General Reserve 14,000 Buildings 98,000
Capitals: Stock 21,000
X            1,19,000 Debtors            42,000
Y            1,12,000 2,31,000 (-) Provision         7,000 35,000
Cash in hand 77,000
3,01,000 3,01,000

Z was admitted for 1/6th share on the following terms:

  • Z will bring ₹56,000 as his share of capital, but was not able to bring any amount to compensate the sacrificing partners.
  • Goodwill of the firm is valued at ₹84,000.
  • Plant and Machinery were found to be undervalued by ₹14,000 Building was to brought up to ₹1,09,000.
  • All debtors are good.
  • Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current accounts.

You are required to prepare revaluation account and partners’ capital account.

Marks-6, CBSE:2022-23/Sample/Q-24*

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