The following is the Balance Sheet of M/s Sukhadeo and Hanumant on 31st March, 2012. They share profits and losses in the proportion of 3/5 and 2/5 respectively.

5. The following is the Balance Sheet of M/s Sukhadeo and Hanumant on 31st March, 2012. They share profits and losses in the proportion of 3/5 and 2/5 respectively.

Balance Sheet as on 31st March, 2012

Liabilities
Rs.
Assets
Rs.
Creditors
124000
Cash at Bank
10000
Capital A/c

Land and Building
50000
Sukhadeo
70,000
Plant and Machinery
70,000
Hanumant
70,000
Furniture
3000


Stock
41000


Debtors
90000





264000

264000

They take Shakuntala into partnership on 1st April, 2012. The terms being:

1. That she shall pay Rs. 10000 as her share of goodwill, the amount to be retained in the business.
2. That she shall bring in Rs. 30000 as capital for one – fourth share in the future profits.
3. The firm's assets were to be revalued as under:
a. Land and Building to be valued at Rs. 60,000; Plant and Machinery and Furniture to be reduced by 10%.
b. A provision of 5% on Debtors is to be made for doubtful debts.
c. The Stock is to be taken at a value of Rs. 50,000.
4. The excess of capital of Sukhadeo and Hanumant over their due proportion of sharing profit in the firm is to be transferred to their respective loan accounts.

Prepare Profit and loss Adjustment Account, Capital account of all partners and Opening Balance sheet of the firm.


Ans.

Profit and loss adjustment a/c
Profit Rs. 7200
Balance sheet total
311200
Bank Balance
50000
Capital A/c

Sukhadeo
54000
Hanumant
36000
Shakuntala
Rs. 30000

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