Murari and Vohra wer partners in a firm with capitals of Rs.120000 and Rs.160000 respectively.on 1.4.11 they admitted Yadav as a partner for one fourth share in profits on his payement of Rs.200000 as his capital and Rs.90000 for his one fourth share of goodwill.

On that date the creditors of Murari and Vohra were Rs.60000 and the bank overdraft was Rs.16000.Their assets apart from cash included stock Rs.10000,debtors Rs.40000,plant and machinery Rs.80000.land and building Rs.200000.It was agreed that stock should be depreciated by Rs.2000,plant and machinery by 20%,Rs.5000 should be written off as bad debts and land and building should be appreciated by 25%.

Prepare revaluationa/c,capital a/c of Murari,Vohra and Yadav and the balance sheet of the new firm..

Balance Sheet of Old Firm

as on April 01, 2011

Liabilities

Amount

Assets

Amount

Creditors

60,000

Stock

10,000

Bank Overdraft

16,000

Debtors

40,000

Capital A/cs:

 

Plant and Machinery

80,000

  Murari

1,20,000

Land and Building

2,00,000

  Vohra

1,60,000

Cash (Balancing Figure)

26,000

 

 

 

 

 

3,56,000

 

3,56,000

 

 

 

 

Thumbs Up to Janine for such a wonderful attempt. However, Balance Sheet of the Old Firm is provided in order to ascertain the Cash Balance.

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Revaluation a/c

Particulars
Amount
Particulars
Amount
To Stock a/c
2000
By Land & Bldg. a/c
50000
To Plant & Mach. a/c
16000
 
 
To Bad debts written off a/c
5000
 
 
To Rev. Profit a/c
27000
 
 
Murari – 13500
 
 
 
Vohra – 13500
 
 
 
 
50000
 
50000

 
 
 
 
 
 
 
 
 
 
 
 
Capital a/c

Particulars
Murari
Vohra
Yadav
Particulars
Murari
Vohra
Yadav
 
 
 
 
By bal b/d
120000
160000
 
 
 
 
 
By Rev. Profit a/c
13500
13500
 
 
 
 
 
By Cash a/c
 
 
200000
 
 
 
 
By Premium a/c
45000
45000
 
To bal c/d
178500
218500
200000
 
 
 
 
 
178500
218500
200000
 
178500
218500
200000

 
Balance Sheet

Liabilities
Amount
Assets
Amount
Creditors
60000
Cash (200000+90000+26000)
316000
Bank O/D
16000
Stock (10000-2000)
8000
Capital a/c’s:
597000
Debtors (40000-5000)
35000
Murari – 178500
 
Plant & Mach. (80000-16000)
64000
Vohra – 218500
 
Land & Bldg. (200000+50000)
250000
Yadav – 200000
 
 
 
 
 
 
 
TOTAL
673000
TOTAL
673000

 
Working Notes:
Calculation of Premium for goodwill to be distributed: (Sacrificing Ratio= 1:1)
Murari - 90000 x  ½ = 45000  
Vohra – 90000 x ½ = 45000
 
 
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