Solve this Q1 Ishu and Vishu are partners sharing profits in the ratio of 3 :2 Their - Accountancy - Reconstitution- Admission of a Partner

Question

Solve this

Q1 Ishu and Vishu are partners sharing profits in the ratio of 3 :2
Their Balance Sheet as 31st March, 2016 was as
follows:

Liabilities
Amount
Assets
Amount

Creditors
Bills payable
Investment Fluctuation Fund
Ishu's Capital
Vishu's Capital
Workmen compensation reserve
66,000
10,000
4,000
1,19,000
1,12,000
4,000
Cash at Bank
Debtors 42,000
Les: Provision 7,000
Investments
(Market price 19,000)
Building
Plant and Machinery
87,000

35,000
21,000
80,000
92,000

3,15,000

Nishu was admitted on that date for 1/6th share on the
following terms:

(i) Nishu will bring 56,000, as his share of capital

(ii) Goodwill of the firm is valued at 84,000 and Nishu will bring
his share of Goodwill in Cash

(iii) Plant and Machinery be appreciaed by 20%

(iv) All debtors are good

(v) There is a liability of 9,800 included in Sunday Creditors that
is not likey to arise

(vi) Capital of Ishu and Vihu will be adjusted on the basis of
Nishu's Capital and any excess of deficiency will be made
withdrawing or bringing in cash by the concemed partner

Prepare the Revaluation Account, Partners' Capital accounts and
Balance Sheet of the new firm

Neha Arora · Accepted Answer

Dear Student, Revaluation Account Dr Cr Particulars Amount Rs Particulars Amount Rs Profit on Revaluation Plant & Machinery 18,400 Ishu 21,120 Provision for DD 7,000 Vishu 14,080 35,200 Creditors 9,800 35,200 35,200 Dr Partners’ Capital Accounts Cr Particulars Ishu Vishu Nishu Particulars Ishu Vishu Nishu Balance b/d 1,19,000 1,12,000 Cash A/c 56,000 Premium for Goodwill A/c 8,400 5,600 Bank A/c (bal fig ) 22,080 Revaluation A/c 21,120 14,080 Balance c/d 1,68,000 1,12,000 56,000 IFF A/c 1,200 800 WCF A/c 2,400 1,600 Bank A/c 15,880 1,68,000 1,34,080 56,000 1,68,000 1,34,080 56,000 â€‹ Balance Sheet Liabilities Amount Rs Assets Amount Rs Capital A/c Cash at Bank 1,50,800 Ishu 1,68,000 Debtors 42,000 Vishu 1,12,000 Plant & Machinery 1,10,400 Nishu 56,000 3,36,000 Investments 19,000 Bills Payable 10,000 Building 80,000 Creditors 56,200 4,02,200 4,02,200 Adjustment of Capital

Nishu apostrophe straight s space Capital equals 56 comma 000 Firm apostrophe straight s space Capital space left parenthesis on space the space basis space of space Nishu apostrophe straight s space Capital right parenthesis equals 56 comma 000 cross times 6 over 1 equals 3 comma 36 comma 000 Ishu apostrophe straight s space New space Capital equals 3 comma 36 comma 000 cross times 3 over 6 equals 1 comma 68 comma 000 Vishu apostrophe straight s space New space Capital equals 3 comma 36 comma 000 cross times 2 over 6 equals 1 comma 12 comma 000 Nishu apostrophe straight s space New space Capital equals 3 comma 36 comma 000 cross times 1 over 6 equals 56 comma 000

New Profit Sharing Ratio

Total space share space be space Re space 1 Nishu apostrophe straight s space share equals 1 over 6 Remaining space share equals 1 minus 1 over 6 equals 5 over 6 Ishu apostrophe straight s space new space share equals 3 over 5 cross times 5 over 6 equals 3 over 6 Vishu apostrophe straight s space new space share equals 2 over 5 cross times 5 over 6 equals 2 over 6 Nishu apostrophe straight s space share equals 1 over 6 Ishu colon Vishu colon Nishu equals 3 colon 2 colon 1

Liabilities	Amount	Assets	Amount
Creditors Bills payable Investment Fluctuation Fund Ishu's Capital Vishu's Capital Workmen compensation reserve	66,000 10,000 4,000 1,19,000 1,12,000 4,000	Cash at Bank Debtors 42,000 Les: Provision 7,000 Investments (Market price 19,000) Building Plant and Machinery	87,000 35,000 21,000 80,000 92,000
	3,15,000		3,15,000

Revaluation Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Profit on Revaluation			Plant & Machinery	18,400
Ishu	21,120		Provision for DD	7,000
Vishu	14,080	35,200	Creditors	9,800
		35,200		35,200

Dr.	Partners’ Capital Accounts								Cr.
Particulars		Ishu	Vishu	Nishu	Particulars	Ishu	Vishu	Nishu
					Balance b/d	1,19,000	1,12,000
					Cash A/c			56,000
					Premium for Goodwill A/c	8,400	5,600
Bank A/c (bal. fig.)			22,080		Revaluation A/c	21,120	14,080
Balance c/d		1,68,000	1,12,000	56,000	IFF A/c	1,200	800
					WCF A/c	2,400	1,600
					Bank A/c	15,880
		1,68,000	1,34,080	56,000		1,68,000	1,34,080	56,000

Balance Sheet
Liabilities		Amount Rs	Assets	Amount Rs
Capital A/c			Cash at Bank	1,50,800
Ishu	1,68,000		Debtors	42,000
Vishu	1,12,000		Plant & Machinery	1,10,400
Nishu	56,000	3,36,000	Investments	19,000
Bills Payable		10,000	Building	80,000
Creditors		56,200
		4,02,200		4,02,200