Ishu and Vishu are partners sharing profits in the ratio of 3:2. Their balance sheet as on 31st March, 2009 was as follows:
Liabilities
Rs.
Assets
Rs.
Creditors
66,000
Cash at bank
87,000
General reserve
10,000
Debtors 42,000 (Provision for (7,000) doubtful debt)
35,000
Investment fluctuation fund
4,000
Investments(market price Rs.19,000)
21,000
Capital A/C:
Ishu 1,19,000 Vishu 1,12,000
2,31,000
Buildings
98,000
Plant and machinery
70,000
3,11,000
3,11,000
Nishu was admitted on that date for 1/6th share in rge following terms:
1. Nishu will bring Rs.56,000 as his share of capital.
2. Goodwill of the firm is valued at Rs.84,000 and Nishu will bring his share of goodwill in cash.
3. Plant and machinery be appreciated by 20%.
4. All debtors are good.
5. There is a liability of Rs.9,800 included in sundry creditors that is not likey to arise.
6. Capitals of Ishu and Vishu will be adjusted on the basis of Nishu's capital and any excess or deficiency will be made by withdrawing or bringing in cash by the concerned partners.
Prepare revaluation account, partners capital account and the balance sheet of the firm after the above adjustments. PLEASE I REQUIRE THE ANSWER IMMEDIATELY.
REVALUATION ACCOUNT
Particulars
Particulars
To profit transferred to
By machinery A/c
14,000
Ishus Capital A/c
15,400
By provision for doubtful debt
7,000
Vishus Capital A/c
15,400
By Creditors A/c
9800
30,800
30,800
Dr. Cr.
Patrtners capital A/c
Dr. Cr.
Particulars
Ishu
(
Vishu
(
Nishu
(
Particulars
Ishu
(
Vishu
(
Nishu
(
To Bank A/c
7,400
400
By Balance b/d
1,19,000
1,12,000
By Bank A/c
56,000
By premium for
goodwill A/c
7,000
7,000
By Revaluation A/c
15,400
15,400
By general reserve
5,000
5,000
To Balance c/d
1,40,000
1,40,000
56,000
By investment fl. Fnd 1
1,000
1,000
1,10,000
2,45,000
3,05,000
1,47,400
1,40,400
56,000
Balance Sheet As at 1st April 2012
Liabilities
Assets
Ishus Capital A/c
1,40,000
Plant and machinery
84,000
Vishus Capital A/c
1,40,000
Investment
19,000
Nishus Capital A/c
56,000
Building
98,000
Creditors
56,200
Debtors
42,000
Bank 2
1,49,200
3,92,200
3,92,200
Note 1: investment fluctuation Fund is utilised against the loss on investment due to the change in cost and market price.
Note 2: bank A/c =(op.bal. 87,000) + (nishus cap. 56,000) + (prmm. For goodwill 14,000) (amt. withdrawn by old partners 7,400+400) = 1,49,200.