OMTEX CLASSES: Mrs. Snehal and Mrs. Meenal are equal partners in a business. Their balance sheet is as follows.

Accountancy Board Paper Solution

Balance Sheet as on 31^st March, 2013 [10 MARKS]

Liabilities		Amount Rs.	Assets		Amount Rs.
Capital A/cs			Premises		20,500
Snehal	80000		Investments		10,500
Meenal	45000	125000	Equipments		5,000
Creditors		46,000	Bills Receivable		18,000
General reserve		20,000	Debtors	110000
			( - ) R.D.D.	11000	99000
			Bank Balance		38,000
		191,000			191,000

They agreed to admit Mr. Komal on 1^st April, 2013 on the following terms:

(1) Komal should bring Rs. 50,000 towards her capital for one fourth (1/4^th )Share in future profit.

(2) Goodwill to be raised in the books of the firm for Rs. 40,000.

(3) R.D.D. to be maintained at 5% on debtors.

(4) Premises to be valued at Rs. 30,000 and equipments to be written off fully.

(5) Creditors allowed a discount of Rs. 1,000 and they were paid off immediately.

Prepare: Profit and Loss Adjustment Account, Partner's Capital Accounts and Balance Sheet of the new firm.

Profit and Loss Adjustments Account.

Particulars		Rs.	Particulars	Rs.
To Equipment		5000	By R.D.D. [11,000 – 5,500]	5,500
To Profit on Revaluation A/c			By Premises	9500
Snehal's Capital A/c	5500		By Creditors	1000
Meenal's Capital A/c	5500	11000
		16000		16,000

Partners' Capital Accounts

Particulars	Snehal	Meenal	Komal	Particulars	Snehal	Meenal	Komal
				By Balance b/d	80,000	45,000	-
				By General Reserve A/c	10,000	10,000	-
				By Bank A/c			50,000
				By Goodwill A/c	20,000	20,000	-
				By Revaluation A/c (Profit)	5500	5500	-
To Balance c/d	115500	80500	50000
	114500	79500	50000		115500	80500	50000

Balance Sheet of the new firm as on 1^st April, 2013

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital A/c			Premises	20500
Snehal	115500		(+) Appreciation	9500	30000
Meenal	80500		Investments		10,500
Komal	50000	246000	Equipments	5,000
			( - ) Written off	- 5000	Nil
Creditors	46,000		Bills Receivable		18,000
( - ) Discount	- 1000		Debtors	1,10,000
	45,000		( - ) R.D.D. @ 5%. p.a.	- 5,500	1,04,500
( - ) Paid off	45,000	Nil	Goodwill [W.N. 1]		40,000
			Bank Balance [W.N. 2]		43,000
		246000			246000

Working Note No. 1. Goodwill A/c

Particulars	Rs.	Particulars	Rs.
To Snehal's Capital A/c	20,000
To Meenal's Capital A/c	20,000
		By Balance c/d	40,000
	40,000		40,000

Bank A/c

Particulars	Rs.	Particulars	Rs.
To Balance b/d	38,000	By Creditors	45000
To Komal's Capital A/c	50,000
		By balance c/d	43,000
	88000		88000

OMTEX AD 2