Q 40 On 31st March, 2015, the balance Sheet of Sanman, Harish and Meeta who were sharing profits and - Accountancy - Reconstitution- Retirement/Death of a Partner

Question

Q 40   O n   31 s t   M a r c h ,   2015 ,
  t h e   b a l a n c e   S h e e t   o f
  S a n m a n ,   H a r i s h   a n d   M e e t
a   w h o   w e r e   s h a r i n g   p r o f i
t s   a n d   l o s s e s   i n   t h e  
r a t i o   o f   2 : 3 : 2   s t o o d   a s
  f o l l o w s :

O n   31 s t   M a r c h ,   2015 ,   H a r i s
h   r e t i r e d   f r o m   t h e   f i r m
  a n d   t h e   r e m a i n i n g   p a r t n
e r s   d e c i d e d   t o   c a r r y   o n
  t h e   b u sin e s s   I t   w a s   a
g r e e d   t o   r e v a l u e   t h e   a s s
e s t s   a n d   l i a b i l i t i e s   a s  
f o l l o w s : ( i )   L a n d   a n d   b u i l d
i n g s   b e   a p p r e c i a t e d   b y  
20 % ( i i )   M a c h i n e r y   b e   d e p r e
c i a t e d   b y   20 % ( i i i )   C l o sin g
  s t o c k   b e   v a l u e d   a t  
₹   4 , 50 , 000 ( i v )   P r o v i s i o n  
f o r   D o u b t f u l   D e b t s   b e   m a
d e   a t   5   o n   D e b t o r s ( v )
  S u n d r y   c r e d i t o r s   o f  
₹   65 , 000   b e   w r i t t e n   o f
f ( v i )   G o o d w i l l   o f   t h e   f i
r m   b e   v a l u e d   a t   ₹  
5 , 60 , 000   a n d   H a r i s h ' s   s h a r e
  o f   t h e   g o o d w i l l b e   a d j u s
t e d   i n   t h e   a c c o u n t s   o f
  S a m a n   a n d   M e e t a   w h o  
w i l l   s h a r e   t h f u t u r e   p r o f i t
s   a n d   l o s s e s   i n   t h e   r
a t i o   o f   3 : 2 ( v i i )   T h e   t o t
a l   c a p i t a l   c a p i t a l   o f   t h
e   n e w l y   c o n s t i t u t e d   f i r m
  w i l l   b e   ₹   35 , 00 , 000 ,
  w h i c h   w i l l   b e   a d j u s t e d
  b y   o p e n i n g   C u r r e n t   A c c o
u n t s ( v i i i )   A m o u n t   d u e   t o
  H a r i s h   w a s   s e t t l e d   b y
  a c c e p t i n g   a   b i l l   o f  
  e x c h a n g e   i n   h i s   f a v o u r
  p a y a b l e   a f t e r   4   m o n t h s P
r e p a r e   R e v a l u a t i o n   A c c o u n t ,
  P a r t n e r s '   C a p i t a l   A c c o u n t
s   a n d   B a l a n c e   S h e e t   o f
  t h e   n r e w   f i r m   o n   H a r
i s h ' s   r e t i r e m e n t

Komal Rani · Answer

Dear Student

Revalution A/c

Date
Particulars
Amount (in Rs)
Date
Particulars
Amount (in Rs)

Machinery
100,000

Land and Building
380,000

Stock
50,000

Sundry Creditors
65,000

Provision for Doubtful debts
35,000

Saman
74,286

Harish
111,428

Meeta
74,286

445,000

Partner's Capital A/c

Particulars
Saman's Capital A/c
Harish's Capital A/c
Meeta's Capital A/c
Particulars
Saman's Capital A/c
Harish's Capital A/c
Meeta's Capital A/c

Harish's Capital A/c
176,000

64,000
Balance b/d
1,000,000
1,500,000
1,000,000

Saman's Capital A/c

176,000

Bills Payable

2,211,428

Meeta's Capital A/c

64,000

Workmen Compensation reserve
240,000
360,000
240,000

Revaluation
74,286
111,428
74,286

Current A/c
961,714

149,714

To Bal C/d
2,100,000
0
1,400,000

2,276,000
2,211,428
1,464,000

Balancesheet

Liabilities
Amount (in Rs)
Assets
Amount (in Rs)

Capital

Land and Building
2,280,000

Saman
2,100,000
Machinery
400,000

Meeta
1,400,000
Closing Stock
450,000

Debtors
665,000

Sundry Creditors
445,000
Furniture
770,000

Bills Payable
2,211,428
Cash
480,000

Current A/c

Saman
961,714

Meeta
149,714

6,156,428

Calculation of Sacrificing and Gaining
Partners

Saman
Harish
Meeta

New Ratio
3/5
0
2/5

Less : Old Ratio
2/7
3/7
2/7

11/35
- 3/7
4/35

Gaining
Sacrificing
Gaining

Gaining Ratio

11:4

Goodwill Adjustment

Total Value of Goodwill

560,000

Harish's share of Goodwill
(5,60,000 x 3/7)
240,000

Distribution in Gaining Ratio

TO Be Adjusted from Saman's Capital A/c
(2,40,000 x 11/15)
176,000

TO Be Adjusted from Meeta's Capital A/c
(2,40,000 x 4/15)
64,000

Total Capital of New Firm

3,500,000

Existing Capital of Saman

1,138,286

Proportionate capital of Saman
(35,00,000 x 3/5)
2,100,000

Transferred to Current A/c
(21,00,000 - 11,38,286)
961,714

Existing Capital of Meeta

1,250,286

Proportionate capital of Meeta
(35,00,000 x 2/5)
1,400,000

Transferred to Current A/c
(14,00,000 - 12,50,286)
149,714

Regards

Revalution A/c
Date	Particulars	Amount (in Rs)	Date	Particulars	Amount (in Rs)
	Machinery	100,000		Land and Building	380,000
	Stock	50,000		Sundry Creditors	65,000
	Provision for Doubtful debts	35,000
	Saman	74,286
	Harish	111,428
	Meeta	74,286


		445,000			445,000

Balancesheet
Liabilities	Amount (in Rs)	Assets	Amount (in Rs)
Capital		Land and Building	2,280,000
Saman	2,100,000	Machinery	400,000
Meeta	1,400,000	Closing Stock	450,000
		Debtors	665,000
Sundry Creditors	445,000	Furniture	770,000
Bills Payable	2,211,428	Cash	480,000

		Current A/c
		Saman	961,714
		Meeta	149,714



	6,156,428		6,156,428

Calculation of Sacrificing and Gaining Partners
	Saman	Harish	Meeta
New Ratio	3/5	0	2/5
Less : Old Ratio	2/7	3/7	2/7
	11/35	- 3/7	4/35
	Gaining	Sacrificing	Gaining