Akash and Suraj are partners in a firm sharing profits and losses in the ratio 3:2. Their balance sheet as on 31st March, 2013 was as follows:

Balance Sheet as on 31st March, 2013
31st march, 2013
Liabilities
Amount
(Rs.)
Assets
Amount
(Rs.)
Capital A/c
Furniture
2,100
Akash
50,000
Stock
28,700
Suraj
50,000
Land and Building
35,000
General Reserve
10,000
Plant and Machinery
49000
Sundry Creditors
60,000
Sundry debtors
63,000
Bills Payable
17,000
Cash
9,200
1,87,000
1,87,000


They agreed to admit Sanjay in their partnership on 1st April, 2013, on the following terms:

(1) Sanjay should bring Rs. 1,500, as his share of goodwill in the firm, and Rs. 2,000 as his capital.
(2) Reserve for doubtful debts is to be provided @ 5% on debtors.
(3) Land and building be depreciated at 10% p.a.
(4) Plant and Machinery to be depreciated @ 5% and stock to be depreciated @ 10% p.a.
(5) The new profit sharing ratio will be 2: 1: 1.

Prepare:
(a) Revaluation Account.
(b) Partners’ Capital Accounts.
(C)  New Balance Sheet of the firm.

Solution:


Revaluation Account
Particulars
Amount
Particulars
Amount
To Stock
2870


To Land and Building
3500


To Plant and Machinery
2450
To Loss of Revaluation A/c

To R.D.D.
3150
Akash’s Capital A/c
7182


Suraj’s Capital A/c
4788

11970

11970

Partners’ Capital Account
Particulars
Akash
Suraj
Sanjay
Particulars
Akash
Suraj
Sanjay
By Loss on Revaluation A/c
7182
4788
-
By Balance b/d
50000
50000





By General Reserve
(3:2)
6000
4000





By Cash A/c


2000




By Goodwill A/c
1167
333

To Balance c/d
49985
49545
2000





57167
54333
2000

57167
54333
2000

New Balance Sheet as on 1 April, 2013
Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Furniture

2100
Akash
49985

Stock
28700

Suraj
49545

(-) Depreciation @ 10%
-2870
25830
Sanjay
2000
101530
Land and Building
35,000

Sundry Creditors

60000
(-) Depreciation @ 10%
-3500
31500
Bills Payable

17000
Plant and Machinery
49000




(-) Depreciation @ 5%
-2450
46550



Sundry debtors
63,000




(-) R.D.D. @ 5%
-3150
59850



Cash

12700


178530


178530



W.N. 1.Cash Account
Particulars
Amount
Particulars
Amount
To Balance b/d
9200


To Sanjay’s Capital A/c
2000


To Goodwill A/c
1500
By Balance c/d
12700

12700

12700


W.N. 2. Goodwill Account.
Particulars
Amount
Particulars
Amount
To Akash’ Capital A/c
1167
By Cash A/c
1500
To Suraj’s Capital
333



1500

1500

W.N. 3. Calculation of Sacrifice Ratio
          S.R. = O.R. – N.R.
Akash’s S.R. =
Suraj’s S.R. =
The Sacrifice Ratio of Old Partners is 2 : 7.

46 comments:

  1. How is sacrifice ratio 2:7? Plzzzzz explain plzzz

    ReplyDelete
  2. Replies
    1. Yeah sacrifice ratio is 2:3

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    2. Yes sacrifice ratio is 2:3 and i get tally of balance sheet by these ratio

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    3. Yes it is 2:3 it is a misprint as the answers in the goodwill gs correct...just it is wrongly written 2:7 rather 2:3..

      Delete
  3. How the good will share is 1167 and 333 plzzz explain

    ReplyDelete
  4. For what other purposes is sacrificing ratio used?

    ReplyDelete
    Replies
    1. When goodwill is given in cash along with new profit sharing ratio

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  5. Exactly how would the sacrifice ratio be 2:7?...its 2:3
    S.R= O.R - N.R
    Akash= 3/5-2/4= 2/20
    Suraj= 2/5-1/4= 3/20
    20 gets cancelled and hence sacrifice ratio comes out to be 2:3.

    ReplyDelete
    Replies
    1. Base equal ka karna Liya cross multiply karna hota hai

      Delete
  6. Please explain sacrifice ratio..7:2

    ReplyDelete
  7. Plz explain sacrifice ration and the goodwill amount

    ReplyDelete
  8. Plz explain sacrifice ratio and goodwill amounts

    ReplyDelete
  9. How goodwill share 1167 and 333

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  10. How goodwill is 1167 & 333

    ReplyDelete
  11. goodwill must be 900 and 600 right?



    ReplyDelete
  12. Sacrifice ratio wrong Hai 2:3 right as Raha hai

    ReplyDelete
  13. solve ho raha hai jb goodwill 900 aur600 lete hai

    ReplyDelete
  14. answer is 178530 balance sheet ka

    ReplyDelete
  15. Goodwill is incorrectly taken
    It's 900 and 600 because given ratio is 3:2

    ReplyDelete
  16. Sacrifice ratio = old ratio - new ratio
    Akash = 3/5 - 2/4 = 2/20 = 1/10
    Suraj = 2/5 - 1/4 = 3/20

    Sacrifice ratio = 1:3 = (1:3)=4

    1500/4 = 375

    Akash = 375
    Suraj = 1125

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  17. Akash ke ratio ko 2 se divide kiya to 1/10 aur suraj ka ratio 3/20 hai base same nahi hai to wrong ratio ayega na
    Common sense! Ratio 2:3 haicalculate properly

    ReplyDelete
  18. akash = 600
    suraj = 900
    Ratio is 2:3

    ReplyDelete
  19. How to come ratio 2/4 and 1/5

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  20. How the sr is 2:7 plzzz explain

    ReplyDelete
  21. Plz explain sacrifice ratio properly

    ReplyDelete