Bhumi and Chavi were partners in a firm sharing profits and losses in the ratio of $\displaystyle 5$ : 3. They admitted Aditi in the firm on 1st April, 2022. On that date their Balance Sheet was as follows : Balance Sheet of Bhumi and Chavi as at 1st April, $\displaystyle 2022$ Amount Amount Liabilities Assets < < Capitals : Machinery $\displaystyle 3,80,000$ Bhumi $\displaystyle 3,20,000$ Furniture $\displaystyle 50,000$ Chavi $\displaystyle 3,40,000$ $\displaystyle 6,60,000$ Debtors $\displaystyle 2,30,000$ General Reserve $\displaystyle 80,000$ Stock $\displaystyle 1,50,000$ Bank loan $\displaystyle 60,000$ Cash $\displaystyle 50,000$ Creditors $\displaystyle 60,000$ $\displaystyle 8,60,000$ $\displaystyle 8,60,000$ $\displaystyle 1$ share in profits on the Aditi was admitted in the firm with $\displaystyle 3$ following terms : (i) Aditi will bring ₹ $\displaystyle 3,00,000$ as her capital. (ii) Aditi will bring her share of goodwill premium in cash. Goodwill of the firm was valued on the basis of two years purchase of average profits of the last three years. Average profits of the last three years were ₹ $\displaystyle 60$,000. (iii) Machinery was revalued at ₹ $\displaystyle 4,60$,000. (iv) The capitals of Bhumi and Chavi were adjusted on the basis of Aditi's capital by opening current accounts. Prepare Revaluation Account and Partners Capital Accounts.

OR

Anna, Bina and Teena were partners sharing profits and losses in the ratio of $\displaystyle 5$ : $\displaystyle 3$ : 2. Their Balance Sheet on 31st March, $\displaystyle 2022$ was as follows : Balance Sheet of Anna, Bina and Teena as at 31st March, $\displaystyle 2022$ Amount Amount Liabilities Assets < < Creditors $\displaystyle 66,000$ Furniture $\displaystyle 1,12,000$ Bills Payable $\displaystyle 59,000$ Stock $\displaystyle 1,77,000$ Debtors $\displaystyle 2,80,000$ Capitals : Less provision for Anna $\displaystyle 2,00,000$ bad debts $\displaystyle 7,000$ $\displaystyle 2,73,000$ Bina $\displaystyle 2,00,000$ Cash $\displaystyle 63,000$ Teena $\displaystyle 1,00,000$ $\displaystyle 5,00,000$ $\displaystyle 6,25,000$ $\displaystyle 6,25,000$ On the above date, Anna retired on the following terms : (i) Goodwill of the firm was valued at ₹ $\displaystyle 60,000$ and Anna's share of goodwill was adjusted through the capital accounts of remaining partners. (ii) Furniture was depreciated by ₹ $\displaystyle 10,000$ . (iii) Anna was to be paid through cash brought in by Bina and Teena in such a way as to make their capitals proportionate to their new profit sharing ratio of $\displaystyle 1$ : 1. Prepare Revaluation and Partners Capital Accounts.

Dr. Revaluation A/c Cr. Particulars Amount Particulars Amount ( ) ( ) To Profit transferred to Partners’ By Machinery A/c ½ $\displaystyle 80,000$ Capital Accounts : ½ Bhumi $\displaystyle 50,000$ Chavi $\displaystyle 30,000$ $\displaystyle 80,000$ $\displaystyle 80,000$ $\displaystyle 80,000$ Dr. Partners’ Capital A/c Cr. Particulars Bhumi Chavi Aditi Particulars Bhumi Chavi Aditi By Balance b/d $\displaystyle 3,20,000$ $\displaystyle 3,40,000$ By Cash A/c ½ $\displaystyle 3,00,000$ By Revaluation A/c (Profit) ½ $\displaystyle 50,000$ $\displaystyle 30,000$ By General $\displaystyle 50,000$ $\displaystyle 30,000$ Reserve A/c $\displaystyle 1$ By Premium for To Balance c/d $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ $\displaystyle 25,000$ $\displaystyle 15,000$ Goodwill A/c $\displaystyle 1$ $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ To Current A/c $\displaystyle 70,000$ $\displaystyle 1,90,000$ --- By Balance b/d $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ $\displaystyle 1$ To Balance c/d $\displaystyle 3,75,000$ $\displaystyle 2,25,000$ $\displaystyle 3,00,000$ $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ $\displaystyle 4,45,000$ $\displaystyle 4,15,000$ $\displaystyle 3,00,000$ Working note: Calculation of New Capitals: Capital of New Firm based on Aditi’s capital = $\displaystyle 3,00,000$ X $\displaystyle 3$= $\displaystyle 9,00,000$ New ratio $\displaystyle 5$:$\displaystyle 3$:$\displaystyle 4$ New Capitals in $\displaystyle 5$:$\displaystyle 3$:$\displaystyle 4$ :- • Bhumi= $\displaystyle 5$/$\displaystyle 12$ X $\displaystyle 9,00,000$= ₹$\displaystyle 3,75,000$ • Chhavi= $\displaystyle 3$/$\displaystyle 12$ X $\displaystyle 9,00,000$= ₹$\displaystyle 2,25,000$ • Aditi= $\displaystyle 4$/$\displaystyle 12$ X $\displaystyle 9,00,000$= ₹$\displaystyle 3,00,000$ Q.(b) Anna, Bina and teena were partners.............................. Ans. Dr. Revaluation A/c Cr. Particulars Amount Particulars Amount ( ) ( ) To Furniture A/c $\displaystyle 10,000$ By Loss transferred to Partners’ Capital Accounts : ½ Anna $\displaystyle 5,000$ Bina $\displaystyle 3,000$ Teena $\displaystyle 2,000$ $\displaystyle 10,000$ $\displaystyle 10,000$ $\displaystyle 10,000$ Page $\displaystyle 14$ Dr. Partners’ Capital A/c Cr. Particulars Anna Bina Teena Particulars Anna Bina Teena To Revaluation By Balance b/d $\displaystyle 2,00,000$ $\displaystyle 2,00,000$ $\displaystyle 1,00,000$ A/c (Loss) ½ $\displaystyle 5,000$ $\displaystyle 3,000$ $\displaystyle 2,000$ ½ To Anna’s By Bina’s Capital A/c ½ $\displaystyle 12,000$ $\displaystyle 18,000$ Capital A/c $\displaystyle 12,000$ $\displaystyle 2,25,000$ $\displaystyle 1,85,000$ $\displaystyle 80,000$ To Balance c/d By Teena’s $\displaystyle 1$ $\displaystyle 18,000$ Capital A/c $\displaystyle 2,30,000$ $\displaystyle 2,00,000$ $\displaystyle 1,00,000$ $\displaystyle 2,30,000$ $\displaystyle 2,00,000$ $\displaystyle 1,00,000$ To Cash A/c/ By Balance b/d $\displaystyle 2,25,000$ $\displaystyle 1,85,000$ $\displaystyle 80,000$ Bank A/c $\displaystyle 1$ $\displaystyle 2,25,000$ By Cash A/c/ --- $\displaystyle 2,45,000$ $\displaystyle 2,45,000$ Bank A/c $\displaystyle 1$ --- $\displaystyle 60,000$ $\displaystyle 1,65,000$ To Balance c/d $\displaystyle 2,25,000$ $\displaystyle 2,45,000$ $\displaystyle 2,45,000$ $\displaystyle 2,25,000$ $\displaystyle 2,45,000$ $\displaystyle 2,45,000$ Working note: 1. Gaining Ratio of Bina and Teena= $\displaystyle 2$:$\displaystyle 3$ 2. Calculation of new capitals of remaining partners: Adjusted Capital of Bina $\displaystyle 1,85,000$ + Adjusted Capital of Teena $\displaystyle 80,000$ + Amount payable to Anna $\displaystyle 2,25,000$ Total Capital of new firm $\displaystyle 4,90,000$ New Capital of Bina $\displaystyle 2,45,000$ New Capital of Teena $\displaystyle 2,45,000$