Q. The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2:3 as at 31st March 2016 is given below:
| Liabilities | Rs. | Assets | Rs. |
| Madhu's Capital Vidhi's Capital General Reserve Bills Payable |
5,20,000 3,00,000 30,000 1,50,000 |
Land and Building Machinery Stock Debtors 3,00,000 Less: Provision 10,000 Bank |
3,00,000 2,80,000 80,000 2,90,000 50,000 |
| 10,00,000 | 10,00,000 |
Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their profit ratio will be 2 : 3 : 5. Gayatri brought Rs. 4,00,000 as her capital and her share of goodwill premium
(a) Goodwill Of the firm was valued at Rs. 3,00,000
(b) Land and Building was found undervalued by Rs. 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the debtors.
(d) There was a claim of Rs. 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm
Dear Student
| Revalution A/c | |||||
| Date | Particulars | Amount (in Rs) | Date | Particulars | Amount (in Rs) |
| Provision for Dountful Debt | 5,000 | Land and Building | 26,000 | ||
| Claim for Workmen Compensation | 6,000 | ||||
| Profit on Revaluation transferred in (2:3) | |||||
| Madhu | 6,000 | ||||
| Vidhu | 9,000 | ||||
| 26,000 | 26,000 | ||||
| Partner's Capital A/c | |||||||
| Particulars | Madhu | Vidhu | Gayatri | Particulars | Madhu | Vidhu | Gayatri |
| Bal B/d | 520,000 | 300,000 | |||||
| Premium for Goodwill A/c | 60,000 | 90,000 | |||||
| Bank | 400,000 | ||||||
| General Reserve | 12,000 | 18,000 | |||||
| Revaluation A/c | 6,000 | 9,000 | |||||
| Bal C/d | 598,000 | 417,000 | 400,000 | ||||
| 598,000 | 417,000 | 400,000 | 598,000 | 417,000 | 400,000 | ||
| Balance sheet | |||
| Liabilities | Amount (in Rs) | Assets | Amount (in Rs) |
| Land and Building | 326,000 | ||
| Claim for Workmen Compensation | 6,000 | Debtors | 300,000 |
| Provision for Doubtful Debt | 15,000 | Machinery | 280,000 |
| Bills Payable | 150,000 | Stock | 80,000 |
| Capital | |||
| Madhu | 598,000 | Bank | 600,000 |
| Vidhu | 417,000 | ||
| Gayatri | 400,000 | ||
| 1,586,000 | 1,586,000 | ||
| Calculation of Sacrificing and Gaining Partners | |||
| Madhu | Vidhu | Gayatri | |
| Old Ratio | 2/5 | 3/5 | |
| Less : New Ratio | 2/10 | 3/10 | 5/10 |
| 2/10 | 3/10 | - 5/10 | |
| Sacrificing | Sacrificing | Gaining | |
| Goodwill Adjustment | ||
| Total Goodwill | 300,000 | |
| Share of Goodwill of Gayatri | (3,00,000 x 5/10) | 150,000 |
| Sacrificing Ratio | 2:3 | |
| Adjustment Through Capital account : | ||
| Madhu | (1,50,000 x 2/5) | 60,000 |
| Vidhu | (1,50,000 x 3/5) | 90,000 |
| Bank A/c | |||||
| Date | Particulars | Amount (in Rs) | Date | Particulars | Amount (in Rs) |
| Bal B/d | 50,000 | Bank loan | |||
| Gyatri's Capital A/c | 400,000 | ||||
| Premium for Goodwill A/c | 150,000 | ||||
| Bal C/d | 600,000 | ||||
| 600,000 | 600,000 | ||||