Gini, Bini and Mini were in partnership sharing profits and losses in the ratio of 5:2:2. Their Balance Sheet as at 31st March, 2021 was as follows:

Balance Sheet as at 31st March,2021

Liabilities Amount (₹) Assets Amount (₹)
Sundry Creditors
Bank Overdraft
Workmen’s Compensation Reserve
Capitals:
Gini 4,60,000
Bini 3,00,000
Mini 2,90,000
56,500
61,500
32,000


10,50,000
Cash
Debtors 38,000
Less: Provision For
Doubtful Debts (2,300)
Inventories
Machinery
Furniture
Building
Goodwill
1,17,300

35,700
1,34,000
1,00,000
1,80,000
5,70,000
63,000
12,00,000 12,00,000

On 31st March, 2021, Gini retired from the firm. All the partners agreed to revalue the assets and liabilities on the following basis: 

(i) Bad debts amounted to 5,000. A provision for doubtful debts was to be maintained at 10% on debtors. 

(ii) Partners have decided to write off existing goodwill. 

(iii) Goodwill of the firm was valued at 54,000 and be adjusted into the Capital Accounts of Bini and Mini, who will share profits in future in the ratio of 5:4. 

(iv) The assets and liabilities valued as: Inventories 1,30,000; Machinery 82,000; Furniture 1,95,000 and Building 6,00,000. 

(v) Liability of 23,000 is to be created on account of Claim for Workmen Compensation. 

(vi) There was an unrecorded investment in shares of 25,000. It was decided to pay off Gini by giving her unrecorded investment in full settlement of her part payment of 28,000 and remaining amount after two months. 

Prepare Revaluation Account and Partners’ Capital Accounts as on 31st March, 2021.

Marks-5, CBSE:2021-22/Term-2/Sample/Q-7*

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