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    Project 9

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    swati

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    Project 9

    Uploaded by

    swati
    7 views3 pages

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    Copyright:

    © All Rights Reserved
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    7 views3 pages

    Project 9

    Uploaded by

    swati

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Project 9

    Leena and Rohit are partners in a firm sharing profits in the ratio of 3: 2. On 31st March, 2018, their
    Balance Sheet was as follows:
    BALANCE SHEET OF LEENA AND ROHIT as at 31st March, 2018
    Liabilities ` Assets `
    Sundry Creditors 80,000 Cash 42,000
    Bills Payable 38,000 Debtors 1,32,000
    General Reserve 50,000 Less: Provision for 2,000 1,30,000
    Capitals: Doubtful Debts
    Leena 1,60,000 Stock 1,46,000
    Rohit 1,40,000 3,00,000 Plant and Machinery 1,50,000
    4,68,000 4,68,000

    On the above date Manoj was admitted as a new partner for 1/5th share in the profits of the firm on the following terms:
    (i) Manoj brought proportionate capital. He also brought his share of goodwill premium of ` 80,000 in cash.
    (ii) 10% of the general reserve was to be transferred to provision for doubtful debts.
    (iii) Claim on account of workmen's compensation amounted to `40,000.
    (iv) Stock was overvalued by `16,000.
    (v)Leena, Rohit and Manoj will share future profits in the ratio of 5:3:2.
    Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm. (CBSE 2019)

    Answer:
    Revaluation Account
    Dr. Cr.
    Particulars Amount Particulars Amount
    ` `
    To workers’ compensation Liabilities 40,000 By loss transferred to ; 56,000
    To Stock 16,000 Rohit×3/5=33,600
    Leena×2/5=22,400
    56,000 56,000
    Partners’ Capital Accounts
    Dr. Cr.
    Particulars Leena Rohit Manoj Particulars Leena Rohit Manoj
    To Revaluation a/c 32,600 22,400 By Balance b/d 160,000 140,000
    To Balance c/d 1,93,400 1,75,600 92,250 By Premium a/c 40,000 40,000
    By General reserve 27,000 18,000
    A/c
    By Cash a/c 92,250
    2,27,000 1,98,000 92,250 2,27,000 1,98,000 92,250

    Balance Sheet
    as on March 31, 2019 after Leander’s admission
    Liabilities Amount Assets Amount
    ` `
    Creditors 80,000 Cash (42,000+80,000+92,250) 2,14,250
    Bills payables 38,000 Debtors
    Workers’ compensation liabilities 40,000 Less; prov. For doubtful debts 1,32,000
    7,000 1,25,000

    Capital a/c; Stock 1,30,000


    Leena 1,93,400 Plant and machinery 1,50,000
    Rohit 1,75,600
    Manoj 92,250 4,61,250
    6,19,250 6,19,250

    Working Notes;
    WN 1:
    Calculation of old ratio and sacrificing ratio
    Leena Rohit Manoj
    OLD RATION 3 : 2
    NEW RATIO 5: 3 : 2
    Sacrificing ratio= Old ratio – New Ratio
    Leena =3/5-5/10=6-5/10=1/10
    Rohit =2/5-3/10=4-3/10=1/10
    Sacrificing ratio of Leena : Rohit=1:1

    WN 2:
    Calculation of Manoj’s capital
    Capital of Leena and Rohit = 1,93,400+1,75,600=3,69,000
    Share of Leena and Rohit = 8/10
    Hence Capital of Leena ,Rohit and Manoj=3,69,000×10/8=4,61,250
    Accordingly capital of Manoj=4,61,250-3,69,000=92,250

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