Nandkishor and Nandlal are in partnership sharing profits and losses in the proportion of ¾ and ¼ respectively. Their Balance Sheet as on 31st March, 2014 was as under.




Balance Sheet as on 31st March, 2014

Liabilities
Rs.
Assets
Rs.
Nandkishor Capital
30000
Land and Building
25000
Nandlal Capital
16000
Furniture
2000
General Reserve
4000
Stock
20000
Sundry Creditors
40000
Sundry Debtors
20000


Bills Receivable
13000


Bank Balance
10000

90000

90000

On 1st April, 2014, they decided to admit Nandram on the following terms.
1. He should be given 1/5th share in profit and for that he should bring in Rs. 20,000 as capital.
2. Goodwill should be raised at Rs. 20,000.
3. Depreciate Furniture and stock by 10% and Create 5% R.D.d. on Debtors
4. Appreciate Land and Building by 20%.
5. The Capitals of all partners should be adjusted in their profit sharing proportion.

Pass the necessary journal entries in the books of the partnership firm and prepare a Balance Sheet of the new firm. 


Ans.

Profit and loss adjustment a/c
Profit: 1800
Balance sheet total
140000
Bank Balance
38200
Capital A/c

Nandkishor
60000
Nandlal
20000
Nandram
20000
New Profit Sharing Ratio
3:1:1

No comments:

Post a Comment