Mr. Baba and Mr. Kaka were in partnership sharing profits and losses in the proportion of 3:2 respectively. Their Balance Sheet as on 31st March, 2012 stood as follows:

9. Mr. Baba and Mr. Kaka were in partnership sharing profits and losses in the proportion of 3:2 respectively. Their Balance Sheet as on 31st March, 2012 stood as follows:


Balance sheet as on 31. 03.2012


Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Capital A/c


Business Premises

140000
Mr. Baba
100000

Furniture & Fixtures

11400
Mr. Kaka
60000
160000
Stock

27000
Current A/c


Debtors

9100
Mr. Baba
1200

Cash at Bank

1100
Mr. Kaka
1400
2600



Loan From Mr. Chacha

20000



Creditors

6000





188600


188600


On 1st April 2012 Mr. Anna was admitted to the firm on the following terms:


(i) Business Premises were to be valued at Rs. 170000 and furniture and fixtures at Rs. 10400. A provision for Bad debts of Rs. 1000 was to be made. Stock should be revalued at Rs. 29,000.


(ii) Mr. Anna should bring in Rs. 40,000 as Capital and Rs. 10,000 as his share of goodwill and it was retained in the business and he should be given one – fourth share in the future profits.


(iii) The loan from Mr. Chacha was to be repaid.


Prepare Profit and Loss Adjustment Account, Partners Current accounts and Balance Sheet of the new firm.



Ans.

Profit and loss adjustment a/c
Profit Rs. 30,000
Balance sheet total
248600
Bank A/c Bal
31100
Current A/c

Baba
25200
Kaka
17400

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