Manish and Nitin are partners in a firm sharing Profits and Losses in the ratio of 3:1. Their Balance Sheet as on 31st March, 2012 was as follows:

Manish and Nitin are partners in a firm sharing Profits and Losses in the ratio of 3:1. Their Balance Sheet as on 31st March, 2012 was as follows:
Balance Sheet as on 31.03.2012
Liabilities
Rs.
Assets
Rs.
Manish's Capital
30000
Cash in Hand
2500
Nitin's Capital
16000
Bills Receivable
6000
Creditors
18000
Debtors
16000
Bills Payable
3000
Stock
20000
General Reserve
4000
Furniture
1500


Land and Building
25000

71000

71000
Sachin is admitted as a partner in the firm on 1st April, 2012 on the following terms:
1. Sachin is to pay Rs. 20,000 as capital for 1/5 th share in future profit and he should bring Rs. 4000 for goodwill.
2. Stock and Furniture to be reduced by 10%.
3. R.D.D. is to be made at 5% on the debtors.
4. Land and Building is to be appreciated by 20%.
You are required to prepare Profit and Loss Adjustment A/c, partner's Capital Accounts and Balance Sheet of the new firm.
Ans. Profit and Loss Adjustment A/c = Profit Rs. 2050
Balance Sheet total = Rs. 97050
Cash A/c Bal. 25600
Capital A/c : Manish = Rs. 37538
Nitin = Rs. 18512
Sachin =  Rs. 20000

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