Project 7
Raman and Rohit were partners in a firm sharing profits and losses in the ratio of 2: 1. On 31st March, 2018, their Balance Sheet was
as follows:
BALANCE SHEET OF RAMAN AND ROHIT as at 31st March, 2018
Liabilities ` Assets `
Capitals: Plant and Machinery 1,75,000
Raman 1,40,000 Furniture and Fixtures 65,000
Rohit 1,00,000 240,000 Stock 47,000
40,000
Workmen Compensation Fund 1,60,000 Debtors 1,10,000
Creditors Less: Provision for Doubtful Debts 7,000 1,03,000
50,000
Bank Balance
4,40,000 4,40,000
On the above date, Saloni was admitted in the partnership firm. Raman surrendered 2/5th of his share
and Rohit surrendered 1/5th of his share in favour of Saloni. It was agreed that:
(i) Plant and machinery will be reduced by `35,000 and furniture and fixtures will be reduced to `58,500.
(ii) Provision for bad and doubtful debts will be increased by `3,000.
(iii) A claim for `16,000 for workmen's compensation was admitted.
(iv) A liability of `2,500 included in creditors is not likely to arise.
(v) Saloni will bring `42,000 as her share of goodwill premium and proportionate capital.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the reconstituted firm. (CBSE 2019)
Answer;
Revaluation Account
Dr. Cr.
Particulars Amount Particulars Amount
` `
Plant and Machinery 35,000 Creditors 2,500
Furniture and fixtures 6,500 Loss transferred to;
Provision of doubtful debts 3,000 Raman’s Capital A/c(42,000×2/3) 28,000
Rohit’s Capital A/c(42,000×1/3) 14,000 42,000
44,500 44,500
Partners’ Capital Accounts
Dr. Cr.
Particulars Abha Binay Chitra Particulars Abha Binay Chitra
To Revaluation 28,000 14,000 By Balance b/d 140,000 1,00,000
To Balance c/d 1,61,600 1,02,400
By Premium 33,600 8,400
By W.C.F. 16,000 8,000
1,89,600 1,16,400 1,89,600 1,16,400
To Balance c/d 1,61,600 1,02,400 1,32,000 Balance c/d 39,500 14,500
Bank A/c 12,500 1,32,000
1,61,600 1,02,400 1,32,000 1,61,600 1,02,400 1,32,000
Balance Sheet
as on April 31, 2019
Liabilities Amount Assets Amount
` `
Creditors 1,57,500 Plant and Machiner 1,40,000
Firniture and fixture 58,500
Stock 47,000
worker compensation 16,000 Debtors 1,10,000
liabilities Less; Prov. For D.D. 10,000 1,00,000
Capital A/cs: Cash at Bank 2,24,000
Raman 1,61,600 (50,000+1,32,000+42,000)
Rohit 1,02,400
Saloni 1,32,000 3,96,000
5,69,500 5,69,500
Working note;
WN-1
Calculation of old and sacrificing ratio
Old ratio Raman: Rohit=2:1
Raman surrenders to Saloni=2/3×2/5=4/15
Rohit surrenders to Saloni=1/3×1/5=1/15
New share of -
Raman=2/3-4/15=10-4/15=6/15
Rohit=1/3-1/15=5-1/15=4/15
Saloni=4/15+1/15+5/15
Therefore new ratio of Raman, Rohit and Saloni =6:4:5
Sacrificing ratio= old – new
Raman=2/3-6/15=10-6/15=4/15
Rahit=1/3-4/15=5-4/15=1/15
WN-1
Calculation of Capital of Raman and Rohit=1,61,600+1,02,400=2,64,000
Share of Raman and Rohit=6/15+4/15=6+4/15=10/15
Therefore, Capital of Raman , Rohit and Saloni=2,64,000×15/10=3,96,000
Saloni’s capital=3,96,000×5/15=1,32,000