A,B and C were partners in a firm having capitals of Rs 60,000 Rs 60,000 and Rs 80,000 respectively. There current account balance were A-10,000 , B-5000 and C-2000 (Dr.).According to the partnership deed the partners were entitled to an intt. on capital @ 5% p.a. C being the working partner was also entitled to a salary of Rs 6,000 p.a. The profits were to be divided as follows:
(i)The first Rs 20,000 in proportion to their capitals.
(ii)next Rs 30,000 in the ratio of 5:3:2.
(iii)remaining profits to be shared equally.
During the year the firm made a profit of Rs 1,56,000 before charging any of the above items. prepare the profit and loss appropriation on A/C.
Creditors were written back Rs. 5000.Which side of the Revaluation a/c will this adjustment fall in?
Creditors were written back Rs. 5000.
Which side of the Revaluation a/c will this adjustment fall in?
According to a question,A and B are partners sharing profits in the proportion of 3:2. Their Balance Sheet as at 31st March, 2012 was as follows:
Liabilities indlude Sundry Creditors-Rs.63000,Outstanding Salaries-Rs.4000,General Reserve-Rs.10000,Capital of A and B are Rs. 50000 and Rs.30000 respectively.
Assets include Cash at Bank-Rs.5000,Sundry Debtors -Rs.30000 less Provision=Rs.1000,,Stock-Rs.40000,Trade Marks-Rs.8000,Building-Rs.75000.
They agree to admit C as a new partner on the following terms:
(1). C will be given 2/9th share of profit and he will bring Rs.50000 for his share of capital and goodwill.
(2). Goodwill of the firm will be calculated at 2.5 yrs purchase of the average super profits of last 4 yrs.Profits of the last 4 yrs. are Rs.40000,Rs,40000,Rs.55000 and Rs.65000 respectively.Normal profits that can be earned with the capital employed are Rs.14000.
(3). Half the amount of goodwill is withdrawn by old partners.
(4). 15% of the general reserve is to remain as a provision against doubtful debts.
(5). Outstanding salaries be increased to Rs.6000,Stock is to be reduced by 20% and buildings be increased by 20%.Trade Marks be written off by 50%.
(6). New profit sharing ratio of partners will be 4:3:2 and the capital accounts of A and B will be adjusted on the basis of C'S capital by bringing in or withdrawing cash,as the case may be.
Prepare necessary accounts and the opening balance sheet the firm.
Please can I get the solution.
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