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Accountancy · 2023 · 6 marks
Reconstitution of a Partnership Firm – Admission of a PartnerRevaluation of Assets and Reassessment of Liabilities6 markslong answer
CBSE 2023 · Region 2 · Set 2 · Q25
Madhav and Girdhari were partners in a firm sharing profits and losses in the ratio of 3:1. Their balance sheet as at 31" March, 2022 was as follows:…
Madhav and Girdhari were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$:1. Their balance sheet as at $\displaystyle 31$" March, $\displaystyle 2022$ was as follows : Balance sheet of Madhav and Girdhari as on 31st March, $\displaystyle 2022$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital : Madhav $\displaystyle 3{,}00{,}000$ | Machinery | $\displaystyle 4{,}70{,}000$ | |
| Girdhari $\displaystyle 2{,}00{,}000$ | $\displaystyle 5{,}00{,}000$ | Investment | $\displaystyle 1{,}10{,}000$ |
| Workmen's compensation fund | $\displaystyle 60{,}000$ | Debtors $\displaystyle 1{,}20{,}000$ | |
| Creditors | $\displaystyle 1{,}90{,}000$ | Less : Provision for doubtful debts $\displaystyle 10{,}000$ | $\displaystyle 1{,}10{,}000$ |
| Employee's Provident fund | $\displaystyle 1{,}10{,}000$ | Stock | $\displaystyle 1{,}40{,}000$ |
| Cash | $\displaystyle 30{,}000$ | ||
| $\displaystyle 8{,}60{,}000$ | $\displaystyle 8{,}60{,}000$ |
On 1st April, $\displaystyle 2022$, they admitted Jyoti into partnership for $\displaystyle 1$/46h share in the profits of the firm. Jyoti brought ₹ $\displaystyle 1{,}86{,}000$ as her capital and ₹ $\displaystyle 40{,}000$ as her share of goodwill premium in cash. The following terms were agreed upon : (i) Stock was found undervalued by ₹ $\displaystyle 23$,000. (ii) $\displaystyle 20$% of the investments were taken over by Girdhari at book value. (iii) Claim on account of workmen's compensation amounted to ₹ $\displaystyle 70{,}000$, which was to be paid later. (iv) Creditors included a sum of ₹ $\displaystyle 27{,}000$ which was not likely to be claimed. Prepare Revaluation A/c and Partners' Capital Accounts on Jyoti's admission.
Radhika, Ridhima and Rupanshi were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$:$\displaystyle 5$:2. On $\displaystyle 31$" March, $\displaystyle 2022$, their balance sheet was as follows : Balance Sheet of Radhika, Ridhima and Rupanshi as on $\displaystyle 31.3.2022$ Liabilities Amount Assets Amount (Q) R) Sundry Creditors $\displaystyle 60{,}000$ Cash $\displaystyle 50{,}000$ General Reserve $\displaystyle 40{,}000$ Stock $\displaystyle 80{,}000$ Capitals : Debtors $\displaystyle 40{,}000$ Radhika $\displaystyle 3{,}00{,}000$ Investments $\displaystyle 30{,}000$ Ridhima $\displaystyle 2{,}00{,}000$ Buildings $\displaystyle 5{,}00{,}000$ Rupanshi $\displaystyle 1{,}00{,}000$ $\displaystyle 6{,}00{,}000$ $\displaystyle 7{,}00{,}000$ $\displaystyle 7{,}00{,}000$ Ridhima retired on the above date and it was agreed that : (i) Goodwill of the firm be valued at ₹ $\displaystyle 3{,}00$,000. (ii) Building was valued at ₹ $\displaystyle 6{,}20$,000. (iii) Capital of the new firm was fixed at ₹ $\displaystyle 5{,}00{,}000$, which will be in the new profit sharing ratio of the partners , the necessary adjustments for this purpose were to be made by opening current accounts of the partners. Prepare Revaluation Account and Partners' Capital Accounts on Ridhima's retirement.
Marking-scheme solution
(a)
Revaluation A/c
Particulars Amount Amount
Particulars
(₹) (₹)
ToWorkmen’s $\displaystyle 10{,}000$ By Stock A/c $\displaystyle 23{,}000$
Compensation Claim A/c By Creditors A/c $\displaystyle 27{,}000$
To Profit transferred to
Partners’ Capital A/c
Madhav ₹$\displaystyle 30{,}000$
$\displaystyle 40{,}000$
Girdhari ₹$\displaystyle 10{,}000$
$\displaystyle 50{,}000$ $\displaystyle 50{,}000$
Dr Partners’ Capital A/c Cr
Particulars Madhav Girdhari Jyoti Particulars Madhav Girdhari Jyoti
₹ ₹ ₹ ₹ ₹ ₹
To Investment -- $\displaystyle 22{,}000$ -- By Balance b/d $\displaystyle 3{,}00{,}000$ $\displaystyle 2{,}00{,}000$ --
A/c
By Cash A/c -- -- $\displaystyle 1{,}86{,}000$
To Bal c/d $\displaystyle 3{,}60{,}000$ $\displaystyle 1{,}98{,}000$ $\displaystyle 1{,}86{,}000$ By Premium for $\displaystyle 30{,}000$ $\displaystyle 10{,}000$ --
Goodwill A/c
--
By Revaluation $\displaystyle 30{,}000$ $\displaystyle 10{,}000$
A/c
$\displaystyle 3{,}60{,}000$ $\displaystyle 2{,}20{,}000$ $\displaystyle 1{,}86{,}000$ $\displaystyle 3{,}60{,}000$ $\displaystyle 2{,}20{,}000$ $\displaystyle 1{,}86{,}000$
Or
Q. (b) Radhika , Ridhima…………………………………………………….
Dr Revaluation A/c Cr
Amount Amount
Particulars Particulars
₹ ₹
To Profit transferred to Partners’
By Building A/c
Capital A/c’s $\displaystyle 1{,}20{,}000$
Radhika $\displaystyle 36{,}000$
Ridhima $\displaystyle 60{,}000$
Rupanshi $\displaystyle 24{,}000$
$\displaystyle 1{,}20{,}000$
$\displaystyle 1{,}20{,}000$ $\displaystyle 1{,}20{,}000$
Dr Partners’ Capital A/c Cr.
Particulars Radhika Ridhima Rupansh Particulars Radhika Ridhima Rupanshi
₹ ₹ i ₹ ₹ ₹
₹
To $\displaystyle 90{,}000$ - $\displaystyle 60{,}000$ By balance b/d $\displaystyle 3{,}00{,}000$ $\displaystyle 2{,}00{,}000$ $\displaystyle 1{,}00{,}000$
Ridhima’s
Capital A/c
By Revaluation $\displaystyle 36{,}000$ $\displaystyle 60{,}000$ $\displaystyle 24{,}000$
A/c
To
Ridhima’s
$\displaystyle 4{,}30{,}000$ By Radhika’s
Loan A/c
Capital A/c
$\displaystyle 90{,}000$
(goodwill)
To Balance By Rupanshi’s
$\displaystyle 3{,}00{,}000$ $\displaystyle 2{,}00{,}000$ $\displaystyle 60{,}000$
c/d Capital A/c
(goodwill)
By General
Reserve A/c $\displaystyle 12{,}000$ $\displaystyle 20{,}000$ $\displaystyle 8{,}000$
By Radhika’s
Current A/c $\displaystyle 42{,}000$
By Rupanshi’s
Current A/c
$\displaystyle 1{,}28{,}000$
$\displaystyle 3{,}90{,}000$ $\displaystyle 4{,}30{,}000$ $\displaystyle 2{,}60{,}000$ $\displaystyle 3{,}90{,}000$ $\displaystyle 4{,}30{,}000$ $\displaystyle 2{,}60{,}000$
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