OMTEX CLASSES: Mr. Amit and Baban share profits and losses in the ratio 2:3 respectively. Their balance sheet as on 31st March 2018 was as under Practical Problems | Q 9

PRACTICAL PROBLEMS [PAGES 161-167]

Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board

Chapter 3 Reconstitution of Partnership (Admission of Partner) Practical Problems [Pages 161 - 167]

Practical Problems | Q 9 | Page 166

Mr. Amit and Baban share profits and losses in the ratio 2:3 respectively. Their balance sheet as on 31st March 2018 was as under

Balance Sheet as On 31st March 2018

Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	1,40,000	Cash	1,10,000
Capital: Amit Baban	100,000 100,000	Land and Building	50,000
		Plant	60,000
		Furniture	4,000
		Stock	1,00,000
		Debtors	16,000
	3,40,000		3,40,000

They agreed decided to admit Kamal on 1st April 2018 on the following terms:

1. Kamal shall have 1/4th share in future profits.

2. They agreed to admit Kamal as a partner on 1st April 2018 on the following terms:

3. She shall bring 50,000 as her capital and 40,000 as her share of goodwill.

4. Land and building to be valued at 60,000 and furniture to be depreciated by 10%

5. Provision for bad and doubtful debts is to be maintained at 5% on the sundry debtors.

6. Stocks to be valued 1,10,000 The capital A/c of all partners to be adjusted in their new profit and loss ratio and excess amount be transferred to their loan accounts.

Prepare profit and loss adjustment A/c, Capital A/cs, and New Balance Sheet.

Dr.	Profit and Loss Adjustment Account				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Depreciation A/c – Furniture		400	By Land and Building A/c	10,000
To R.D.D. A/c		800	By Stock A/c	10,000
To Profit on Revaluation Transferred to Partners’ Capital A/cs: Amit 7,520 Baban 11,280		18,800
		20,000		20,000

Dr.	Partners’ Capital Accounts								Cr.
Particulars		Amit (₹)	Baban (₹)	Kamal (₹)	Particulars	Amit (₹)	Baban (₹)	Kamal (₹)
To Partners’ Loan A/c		63,520	45,280		By Balance b / d	1,00,000	1,00,000
To Balance c/d		60,000	90,000	50,000	By Bank A/c			50,000
					By Goodwill A/c	16,000	24,000
					By Revaluation A/c (Profit)	7,520	11,280
		1,23,520	1,35,280	50,000		1,23,520	1,35,280	50,000

Balance Sheet as on 1st April 2018

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital A/cs: Amit Baban Kamal	60,000 90,000 50,000	2,00,000	Cash		2,00,000
Creditors		1,40,000	Land and Building Add: Appreciation	50,000 10,000	60,000
Partners’ Loan : Amit Baban	63,520 45,280	1,08,800	Plant		60,000
			Furniture Less: Depreciation	4,000 400	3,600
			Stock Add: Appreciation	1,00,000 10,000	1,10,000
			Debtors Less: R.D.D.	16,000 800	15,200
		4,48,800			4,48,800

Working Notes :

(1) Cash balance = Opening balance + Amount brought in by Kamal

= 1,10,000 + 50,000 + 40,000

= Rs. 2,00,000

(2) For the calculation of new profit and loss ratio:

Refer to Working Note (1) of Textual Problem no. 1

(3) New profit and loss ratio = 6: 9: 5

Capital amount adjusted in their new profit and loss ratio by taking new partner Kamal’s capital (₹ 50,000) as a base.

∴ For part 5 capital = ₹ 50,000 (Kamal’s capital)

∴ For part 6 capital = ₹ 60,000 (Amit’s capital)

∴ For part 9 capital = ₹ 90,000 (Baban’s capital)

(4) After keeping these capital balances difference of the amount of Amit’s capital ₹ 63,520 and of Baban’s capital ₹ 45,280 are taken as partner’s loan to the firm and as a liability of the firm it is recorded in the Liabilities side of Balance Sheet.

PRACTICAL PROBLEMS [PAGES 161 - 167]

Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board Chapter 3 Reconstitution of Partnership (Admission of Partner) Practical Problems [Pages 161 - 167]

Practical Problems | Q 1 | Page 161

Practical Problems | Q 2 | Page 161

Practical Problems | Q 3 | Page 162

Practical Problems | Q 4 | Page 163

Practical Problems | Q 5 | Page 163

Practical Problems | Q 6 | Page 164

Practical Problems | Q 7 | Page 164

Practical Problems | Q 8 | Page 165

Practical Problems | Q 9 | Page 166

Practical Problems | Q 10 | Page 167

Select appropriate alternatives from those given below and rewrite the sentence.

Write a word/phrase/term which can substitute the following statement.