Double Entry Book Keeping Ts Grewal (2016) Solutions for Class 12 Commerce Accountancy Chapter 5 Change In Profit Sharing Ratio are provided here with simple step-by-step explanations. These solutions for Change In Profit Sharing Ratio are extremely popular among class 12 Commerce students for Accountancy Change In Profit Sharing Ratio Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal (2016) Book of class 12 Commerce Accountancy Chapter 5 are provided here for you for free. You will also love the ad-free experience on Meritnationâ€™s Double Entry Book Keeping Ts Grewal (2016) Solutions. All Double Entry Book Keeping Ts Grewal (2016) Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.

#### Page No 5.28:

Old Ratio = 2 : 2 : 1

Case 1:If C acquires 1/5th share from B

Case 2: If C acquires 1/5th share equally from A and B

Case 3: If A, B and C decide to share future profits and losses equally

Case 4: If A, B and C decide to share future profits and losses in the ratio of 2 : 1 : 2

#### Page No 5.28:

Old Ratio (X, Y and Z) = 5 : 3 : 2

New Ratio (X, Y and Z) = 1 : 1 : 1

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

Y’s Gain = 1/30

Z’s Gain = 4/30

X’s Sacrifice = 5/30

#### Page No 5.28:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 April 01 Case 1 B’s Capital A/c Dr. 1,800 C’s Capital A/c Dr. 7,200 To A’s Capital A/c 9,000 (Adjustment entry made for goodwill) Case 2 A’s Capital A/c Dr. 27,000 B’s Capital A/c Dr. 16,200 C’s Capital A/c Dr. 10,800 To Goodwill A/c 54,000 (Existing goodwill written-off) B’s Capital A/c Dr. 1,800 C’s Capital A/c Dr. 7,200 To A’s Capital A/c 9,000 (Adjustment entry made for goodwill)

Working Notes:

WN1: Calculation of Sacrificing or Gaining Ratio

WN2: Calculation of Share in Goodwill

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount Rs Credit Amount Rs C’s Capital A/c Dr. 3,000 To A’s Capital A/c 3,000 (Adjustment of goodwill made on change in profit sharing ratio)

Working Notes:

Old Ratio (A, B and C) = 3 : 2 : 1

New Ratio (A, B and C) = 1 : 1 : 1

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

Goodwill of the firm = Rs 18,000

A will receive for goodwill =

C will give for goodwill =

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount Rs Credit Amount Rs A’s Capital A/c Dr. 6,000 To B’s Capital A/c 6,000 (Adjustment of profit for 2015-16 on change in profit sharing ratio) B’s Capital A/c Dr. 9,000 To A’s Capital A/c 9,000 (Adjustment of goodwill made on change in profit sharing ratio)

 Partners’ Capital Accounts Dr. Cr. Particulars A Rs B Rs Particulars A Rs B Rs B's Capital A/c 6,000 – Balance b/d 1,50,000 90,000 (Adjustment of profit) A's Capital A/c – 6,000 A's Capital A/c – 9,000 (Adjustment Profit) (Adjustment of Goodwill) B's Capital A/c 9,000 – Balance c/d 1,53,000 87,000 (Adjustment of Goodwill) 1,59,000 96,000 1,59,000 96,000

Working Notes:

WN 1 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (A and B) = 2 : 1

New Ratio (A and B) = 3 : 2

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

WN 2 Adjustment of Profit for 2015-16

WN 3 Calculation of New Goodwill

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 Apr. 01 General Reserve A/c Dr. 36,000 Profit & Loss A/c Dr. 72,000 To X’s Capital A/c $\left(1,08,000 × \frac{3}{6}\right)$ 54,000 To Y’s Capital A/c $\left(1,08,000 × \frac{2}{6}\right)$ 36,000 To Z’s Capital A/c $\left(1,08,000 × \frac{1}{6}\right)$ 18,000 (Distributed balance of general reserve & profit & loss in old profit sharing ratio)

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) A’s Capital A/c Dr. 18,000 B’s Capital A/c Dr. 12,000 To Profit & Loss A/c 30,000 (Distributed debit balance of Profit & Loss Account in old profit sharing ratio)

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2014 Apr. 01 C’s Capital A/c Dr. 9,000 To A’s Capital A/c 4,500 To B’s Capital A/c 4,500 (Adjustment entry made for credit balance of Profit and Loss Account)

Working Notes:

WN1: Calculation of Sacrificing or Gaining Ratio

WN2: Calculation of Share of Goodwill

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 Apr. 01 Case 1 Workmen Compensation Reserve A/c Dr. 12,000 To X’s Capital A/c 6,000 To Y’s Capital A/c 3,600 To Z’s Capital A/c 2,400 (Distributed workmen compensation reserve in old ratio) Case 2 Workmen Compensation Reserve A/c Dr. 12,000 To Provision for Workmen Compensation Claim A/c 1,500 To X’s Capital A/c 5,250 To Y’s Capital A/c 3,150 To Z’s Capital A/c 2,100 (Provision created and excess amount is distributed among the partners in old ratio) Case 3 Workmen Compensation Reserve A/c Dr. 12,000 Revaluation A/c 10,000 To Provision for Workmen Compensation Claim A/c 22,000 (Created provision for workmen compensation reserve) X’s Capital A/c Dr. 5,000 Y’s Capital A/c Dr. 3,000 Z’s Capital A/c Dr. 2,000 To Revaluation A/c 10,000 (Transferred loss of revaluation to Partners’ Capital Account in old ratio)

#### Page No 5.29:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 April 01 Case: 1 Workmen Compensation Reserve A/c Dr. 12,000 To Liability for Workmen Compensation A/c 1,500 To X’s Capital A/c 5,250 To Y’s Capital A/c 3,150 To Z’s Capital A/c 2,100 (Transferred to liability and excess amount is transferred to partners’ capital account in old ratio) Case: 2 Workmen Compensation Reserve A/c Dr. 12,000 Revaluation A/c 10,000 To Liability for Workmen Compensation A/c 22,000 (Transferred liability of workmen compensation reserve) X’s Capital A/c Dr. 5,000 Y’s Capital A/c Dr. 3,000 Z’s Capital A/c Dr. 2,000 To Revaluation A/c 10,000 (Transferred loss of revaluation to Partners’ Capital Account)

#### Page No 5.30:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 Apr. 01 Case 1 Investment Fluctuation Reserve A/c Dr. 10,000 To X’s Capital A/c 5,000 To Y’s Capital A/c 3,000 To Z’s Capital A/c 2,000 (Distributed investment fluctuation reserve in old ratio) Case 2 Investment Fluctuation Reserve A/c Dr. 10,000 To X’s Capital A/c 5,000 To Y’s Capital A/c 3,000 To Z’s Capital A/c 2,000 (Distributed investment fluctuation reserve in old ratio) Case 3 Investment Fluctuation Reserve A/c Dr. 10,000 To Investments A/c 5,000 To X’s Capital A/c 2,500 To Y’s Capital A/c 1,500 To Z’s Capital A/c 1,000 (Transferred to investments and distributed excess amount in old ratio) Case 4 Investment Fluctuation Reserve A/c Dr. 10,000 Revaluation A/c Dr. 5,000 To Investments A/c 15,000 (Amount transferred to Investments Account) X’s Capital A/c Dr. 2,500 Y’s Capital A/c Dr. 1,500 Z’s Capital A/c Dr. 1,000 To Revaluation A/c 5,000 (Revaluation loss transferred to Partners’ Capital Account in old ratio) Case 5 Investment Fluctuation Reserve A/c Dr. 10,000 To X’s Capital A/c 5,000 To Y’s Capital A/c 3,000 To Z’s Capital A/c 2,000 (Distributed investment fluctuation reserve in old ratio) Investments A/c Dr. 10,000 To Revaluation A/c 10,000 (Profit on revaluation of investments transferred to Revaluation A/c) Revaluation A/c Dr. 10,000 To X’s Capital A/c 5,000 To Y’s Capital A/c 3,000 To Z’s Capital A/c 2,000 (Distributed profit on revaluation among the partners in old ratio)

#### Page No 5.30:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 1 X’s Capital A/c Dr. 12,000 Y’s Capital A/c Dr. 8,000 Z’s Capital A/c Dr. 4,000 To Goodwill A/c 24,000 (Goodwill written-off among the partners in old ratio) 2 X’s Capital A/c Dr. 18,000 Y’s Capital A/c Dr. 12,000 Z’s Capital A/c Dr. 6,000 To Profit & Loss A/c 36,000 (Loss is distributed among partners in old ratio) 3 General Reserve A/c Dr. 60,000 To X’s Capital A/c 30,000 To Y’s Capital A/c 20,000 To Z’s Capital A/c 10,000 (Distributed General Reserve in old ratio) 4 Workmen Compensation Reserve A/c Dr. 30,000 To Liability against Workmen Compensation Reserve A/c 12,000 To X’s Capital A/c 9,000 To Y’s Capital A/c 6,000 To Z’s Capital A/c 3,000 (Liability against workmen compensation reserve is transferred and distributed excess reserve in old ratio) 5 Z’s Capital A/c Dr. 30,000 To X’s Capital A/c 30,000 (Goodwill adjusted through partners’ capital accounts in sacrificing or gaining ratio)

Working Notes: Calculation of Sacrificing or Gaining Ratio

#### Page No 5.30:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 1 Workmen Compensation Reserve A/c Dr. 25,000 To Claim against Workmen Compensation Reserve A/c 5,000 To A’s Capital A/c 10,000 To B’s Capital A/c 6,000 To C’s Capital A/c 4,000 (Claim against workmen compensation reserve is transferred and distributed excess reserve in old ratio) 2. Investment Fluctuation Reserve A/c Dr. 15,000 To Investments A/c 5,000 To A’s Capital A/c 5,000 To B’s Capital A/c 3,000 To C’s Capital A/c 2,000 (Transferred and distributed Investment Fluctuation Reserve in old ratio) 3 General Reserve A/c Dr. 50,000 To A’s Capital A/c 25,000 To B’s Capital A/c 15,000 To C’s Capital A/c 10,000 (Distributed general reserve in old ratio) 4 Profit & Loss A/c Dr. 40,000 To A’s Capital A/c 20,000 To B’s Capital A/c 12,000 To C’s Capital A/c 8,000 (Distributed profits in old ratio) 5 A’s Capital A/c Dr. 10,000 B’s Capital A/c Dr. 6,000 C’s Capital A/c Dr. 4,000 To Advertisement Expenses A/c 20,000 (Deferred revenue expenditure distributed among the partners in old ratio)

#### Page No 5.30:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) Investment Fluctuation Reserve  A/c Dr. 15,000 Revaluation A/c Dr. 35,000 To Investments A/c 50,000 (Transferred fall in the value of investments from reserve and revaluation) X’s Capital A/c Dr. 17,500 Y’s Capital A/c Dr. 10,500 Z’s Capital A/c Dr. 7,000 To Revaluation A/c 35,000 (Transferred loss on revaluation of investments to partners’ capital accounts) Workmen Compensation Reserve A/c Dr. 25,000 To Claim for Workmen Compensation Reserve A/c 5,000 To X’s Capital A/c 10,000 To Y’s Capital A/c 6,000 To Z’s Capital A/c 4,000 (Transferred to Claim and distributed excess reserve in old ratio) General Reserve A/c Dr. 1,50,000 To X’s Capital A/c 75,000 To Y’s Capital A/c 45,000 To Z’s Capital A/c 30,000 (Distributed general reserve among partners in old ratio) Profit & Loss A/c Dr. 20,000 To X’s Capital A/c 10,000 To Y’s Capital A/c 6,000 To Z’s Capital A/c 4,000 (Distributed profits among partners in old ratio)

#### Page No 5.31:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 Apr. 01 Revaluation A/c Dr. 28,600 To Stock A/c 10,000 To Machinery A/c 15,900 To Provision for Doubtful Debts A/c 2,700 (Value of assets decreased and provision is created for debtors) Apr. 01 Land & Building A/c Dr. 40,000 Creditors A/c Dr. 3,000 To Revaluation A/c 43,000 (Value of Land & Building and creditors increased) Apr. 01 Revaluation A/c Dr. 14,400 To A’s Capital A/c 5,400 To B’s Capital A/c 5,400 To C’s Capital A/c 3,600 (Profit made on revaluation transferred to Partners’ Capital Account) Apr. 01 A’s Capital A/c Dr. 9,000 B’s Capital A/c Dr. 9,000 C’s Capital A/c Dr. 6,000 To Advertisement Expenditure A/c 24,000 (Distributed deferred revenue expenditure) Apr. 01 A’s Capital A/c Dr. 5,000 To B’s Capital A/c 3,000 To C’s Capital A/c 2,000 (Adjustment entry made for general reserve through partners’ capital accounts)

Working Notes:

WN1:  Calculation of Sacrificing or Gaining Ratio

#### Page No 5.31:

(i) If revised values are not to be shown in the books

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) Z’s Capital A/c Dr. 10,500 To X’s Capital A/c 10,500 (Revaluation adjusted through capitals)

Working Notes:

WN1: Calculation of Sacrificing or Gaining Ratio

WN2 Calculation of Profit or Loss on Revaluation

 Increase in value of Land & Building = 50,000 Decrease in value of Creditors = 10,000 Less: Decrease in value of P & M = 10,000 Less: Increase in O/s Expenses = 15,000 Profit on Revaluation = Rs 35,000

(ii) If revised values are to be shown in the books

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) Revaluation A/c Dr. 10,000 To Plant & Machinery A/c 10,000 (Decrease in the value of plant & machinery) Land & Building A/c Dr. 50,000 To Revaluation A/c 50,000 (Increase in the value of Land & Building) Trade Creditors A/c Dr. 10,000 To Revaluation A/c 10,000 (Decrease in the value of creditors) Revaluation A/c Dr. 15,000 To Outstanding Expenses A/c 15,000 (Increase in Outstanding expenses) Revaluation A/c Dr. 35,000 To X’s Capital A/c 17,500 To Y’s Capital A/c 10,500 To Z’s Capital A/c 7,000 (Profit on revaluation transferred to Partners’ Capital Accounts)

#### Page No 5.32:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 White’s Capital A/c Dr. 16,000 Apr. 01 To Black’s Capital A/c 16,000 (Adjustment entry made for change in ratio)

Working Notes:

WN1:  Calculation of Sacrificing or Gaining Ratio

WN
2
:  Calculation of amount to be distributed

#### Page No 5.32:

 Revaluation Account Particulars Amount (Rs) Particulars Amount (Rs) Provision for Doubtful Debts 10,000 Land & Building 1,50,000 Depreciation on Furniture 50,000 Profit transferred to: X’s Capital A/c 60,000 Y’s Capital A/c 30,000 90,000 1,50,000 1,50,000
 Partners’ Capital Accounts Dr. Cr. Date Particulars X Y Date Particulars X Y 2016 2016 April 01 Balance c/d 7,10,000 3,80,000 April 01 Balance b/d 6,50,000 3,50,000 Revaluation A/c 60,000 30,000 7,10,000 3,80,000 7,10,000 3,80,000

#### Page No 5.32:

 Journal Date Particulars L.F. Debit Amount Rs Credit Amount Rs A’s Capital A/c Dr. 4,000 To B’s Capital A/c 4,000 (Adjustment of General Reserve on change in profit sharing ratio)

 Partners’ Capital Accounts Dr. Cr. Particulars A B Particulars A B B’s Capital A/c 4,000 – Balance b/d 2,40,000 1,20,000 (Adjustment of General Reserve) Revaluation (Profit) 18,000 13,500 Balance c/d 2,54,000 1,37,500 A’s Capital A/c – 4,000 (Adjustment of General Reserve) 2,58,000 1,37,500 2,58,000 1,37,500

 Balance Sheet Liabilities Amount Rs Assets Amount Rs Sunday Creditors (28,000 –3,700) 24,300 Cash 20,000 General Reserve 42,000 Sundry Debtors 1,20,000 Capital Account Less: Provision for Doubtful Debts (7,200) 1,12,800 A 2,54,000 Stock 1,90,000 B 1,37,500 3,91,500 Fixed Assets (1,50,000 – 15,000) 1,35,000 4,57,800 4,57,800

Working Notes:

WN 1 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (A and B) = 4 : 3

New Ratio (A and B) = 2 : 1

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

WN 2 Adjustment of General Reserve

WN 3

 Revaluation Account Dr. Cr. Particulars Amount Rs Particulars Amount Rs Fixed Assets 15,000 Stock 50,000 Provision for Doubtful Debts (1,20,000 × 6%) 7,200 Creditors 3,700 Profit transferred to: A’s Capital A/c 18,000 B’s Capital A/c 13,500 31,500 53,700 53,700

#### Page No 5.33:

 Partners’ Capital Accounts Dr. Cr. Particulars X Y Z Particulars X Y Z Y’s Capital 10,000 – – Balance b/d 6,00,000 4,00,000 2,00,000 Z’s Capital 5,000 – – X’s Capital – 10,000 5,000 Balance c/d 5,85,000 4,10,000 2,05,000 6,00,000 4,10,000 2,05,000 6,00,000 4,10,000 2,05,000
 Revised Balance Sheet as at April 01, 2016 Liabilities Amount (Rs) Assets Amount (Rs) Capital : Land & Building 7,00,000 X 5,85,000 Plant & Machinery 3,00,000 Y 4,10,000 Stock 2,00,000 Z 2,05,000 12,00,000 Debtors 70,000 Creditors 1,00,000 Cash at Bank 30,000 13,00,000 13,00,000

Working Notes:

WN1: Calculation of Sacrificing or Gaining Ratio

WN2: Calculation of Profit or Loss on Revaluation

 Plant & Machinery = Rs 30,000 Land & Building = Rs 1,50,000 Stock = Rs (30,000) Total = Rs 1,50,000

â€‹â€‹

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) X’s Capital A/c Dr. 15,000 To Y’s Capital A/c 10,000 To Z’s Capital A/c 5,000 (Adjustment entry made for change in ratio)

#### Page No 5.33:

 Journal Date Particulars L.F. Debit Amount Rs Credit Amount Rs A's Capital A/c Dr. 2,500 To C's Capital A/c 2,500 (Revaluation Profit and General Reserve adjusted on change in profit sharing ratio)

 Balance Sheet Liabilities Amount Rs Assets Amount Rs Sundry Creditors 40,000 Cash at Bank 40,000 Outstanding Expenses 15,000 Sundry Debtors 2,10,000 General Reserve 75,000 Stock 3,00,000 Capital Accounts: Furniture 60,000 A 3,97,500 Plant and Machinery 4,20,000 B 3,00,000 C 2,02,500 9,00,000 10,30,000 10,30,000

Working Notes:

WN 1 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (A, B and C) = 5 : 4 : 3

New Ratio (A, B and C) = 4 : 3 : 2

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

WN 2 Calculation of Profit or Loss on Revaluation

 Particulars Amount (Rs) Increase in Stock 60,000 (Cr.) Decrease in Furniture (12,000) (Dr.) Decrease in Plant and Machinery (20,000) (Dr.) Increase in Provision for Debtors (10,000) (Dr.) Increase in Outstanding Expenses (3,000) (Dr.) Profit on Revaluation 15,000 (Cr.)

WN 3 Adjustment of Profit on Revaluation and General Reserve

Amount for Adjustment = Profit on Revaluation + General Reserve = 15,000 + 75,000 = Rs 90,000

WN 4

 Partners’ Capital Accounts Dr. Cr. Particulars A B C Particulars A B C C's Capital A/c 2,500 – – Balance c/d 4,00,000 3,00,000 2,00,000 A's Capital A/c – – 2,500 Balance c/d 3,97,500 3,00,000 2,02,500 4,00,000 3,00,000 2,02,500 4,00,000 3,00,000 2,02,500

#### Page No 5.34:

 Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2016 March 31 X’s Capital A/c Dr. 20,000 Y’s Capital A/c Dr. 30,000 Z’s Capital A/c Dr. 10,000 To Goodwill A/c 60,000 (Existing goodwill written-off) X’s Capital A/c Dr. 1,55,000 To Y’s Capital A/c 1,55,000 (Goodwill adjusted by debiting gaining partner and crediting sacrificing partner) Land and Building A/c Dr. 1,25,000 To Revaluation A/c 1,25,000 (Increase in value of land & building recorded in Revaluation Account) Revaluation A/c Dr. 67,500 To Stock A/c 40,000 To Provision for Doubtful Debts A/c 27,500 (Decrease in value of stock and increase in provision for doubtful debts, recorded in revaluation) Revaluation A/c Dr. 57,500 To X’s Capital A/c 19,167 To Y’s Capital A/c 28,750 To Z’s Capital A/c 9,583 (Profit on revaluation transferred to Partners’ Capital Accounts in old profit sharing ratio of 2 : 3 : 1) Workmen Compensation Reserve A/c Dr. 1,00,000 To Workmen Compensation Claim A/c 40,000 To X’s Capital A/c 20,000 To Y’s Capital A/c 30,000 To Z’s Capital A/c 10,000 (Excess balance of WCR transferred to partners’ capital account) Investments Fluctuation Reserve A/c Dr. 50,000 To Investments A/c 20,000 To X’s Capital A/c 10,000 To Y’s Capital A/c 15,000 To Z’s Capital A/c 5,000 (Decrease in market value of investments settled through IFF and excess balance is transferred to partners’ capital accounts) X’s Capital A/c Dr. 20,000 Y’s Capital A/c Dr. 30,000 Z’s Capital A/c Dr. 10,000 To Advertisement A/c 60,000 (Balance of Advertisement Suspense Account is debited to Partners’ Capital Account)

 Revaluation Account Dr. Cr. Particulars Amount Rs Particulars Amount Rs Stock 40,000 Land and Building 1,25,000 Provision for Doubtful Debts 27,500 Profit transferred to: X’s Capital A/c 19,167 Y’s Capital A/c 28,750 Z’s Capital A/c 9,583 57,500 1,25,000 1,25,000

 Partners’ Capital Accounts Dr. Cr. Particulars X Y Z Particulars X Y Z Y’s Capital A/c 1,55,000 Balance b/d 5,00,000 10,00,000 15,00,000 Advertisement Suspense A/c 20,000 30,000 10,000 Revaluation A/c 19,167 28,750 9,583 Goodwill A/c 20,000 30,000 10,000 Workmen Compensation Reserve 20,000 30,000 10,000 Balance c/d 3,54,167 11,68,750 15,04,583 Investment Fluctuation Reserve 10,000 15,000 5,000 X’s Capital A/c 1,55,000 5,49,167 12,28,750 15,24,583 5,49,167 12,28,750 15,24,583

 Balance Sheet as at March 31, 2016 Liabilities Amount Rs Assets Amount Rs Capital A/cs: Investments 2,30,000 X 3,54,167 Land and Building 12,50,000 Y 11,68,750 Add: Undervaluation 1,25,000 13,75,000 Z 15,04,583 30,27,500 Stock 4,00,000 Workmen Compensation Claim 40,000 Less: Overvaluation 40,000 3,60,000 Employees Provident Fund 50,000 Debtors 15,50,000 Creditors 18,00,000 Less: Prov. For D/D 77,500 14,72,500 Bank 14,80,000 49,17,500 49,17,500

Working Notes:

WN 1: Calculation of sacrificing/gaining ratio

WN 2: Calculation of goodwill

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