Solve the following:
3. The Balance Sheet of A, B and C on 31st March, 2007 was as follows:
| Liabilities | Amt. (Rs.) | Assets | Amit. (Rs.) |
| Creditors A's Capital A/c B's Capital A/c C's Capital |
50,000 80,000 80,000 60,000 |
P&L A/c Land & Buildings Plant & Machinery Motor Car Debtors Cash |
30,000 80,000 56,000 54,000 48,000 2,000 |
| 2,70,000 | 2,70,000 |
The following terms were agreed upon A's retirement.
(a) Goodwill to be valued at Rs.42,000 and not to be shown in the books after A's retirement.
(b) Land and Buildings to be appreciated by Rs.20,000.
(c) Plant and Machinery to be reduced to Rs.46,000.
(d) Provision for doubtful debts to be created at 5% on Debtors.
(e) Create a provision of Rs. 1,400 for discount on creditors.
(f) The sum payable to A to be brought in by B and C in such a manner that their capitals are in proportion to the profit sharing ratio.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet to give effect to the above.
Dear Student
Regards
| Revalution A/c | |||||
| Date | Particulars | Amount (in Rs) | Date | Particulars | Amount (in Rs) |
| Plant and Macinery | 10,000 | ||||
| Provision for doubtful debt | 2,400 | Land and Building | 20,000 | ||
| Less : Provision for Discount on Creditors | 1,400 | ||||
| Capital A/c - Rs 9,000 in 1:1:1 | |||||
| A | 3,000 | ||||
| B | 3,000 | ||||
| C | 3,000 | ||||
| 21,400 | 21,400 | ||||
| Partner's Capital A/c | |||||||
| Particulars | A | B | C | Particulars | A | B | C |
| A's Capital A/c | 7,000 | 7,000 | Balance b/d | 80,000 | 80,000 | 60,000 | |
| P & L A/c | 10,000 | 10,000 | 10,000 | B's Capital A/c | 7,000 | ||
| Cash A/c | 87,000 | C's Capital A/c | 7,000 | ||||
| Revaluation A/c | 3,000 | 3,000 | 3,000 | ||||
| Cash A/c | 33,500 | 53,500 | |||||
| To Bal C/d | 0 | 99,500 | 99,500 | ||||
| 97,000 | 116,500 | 116,500 | 97,000 | 116,500 | 116,500 | ||
| Balancesheet | |||||
| Liabilities | Amount (in Rs) | Assets | Amount (in Rs) | ||
| Capital | Land and Building | 100,000 | |||
| B | 99,500 | Debtors | 48000 | ||
| C | 99,500 | Less :Provision | 2400 | 45,600 | |
| Plant and Machinery | 46,000 | ||||
| Creditors | 50,000 | Motor Car | 54,000 | ||
| Less : Provision for Discount on Creditors | 1400 | 48,600 | Cash | 2,000 | |
| 247,600 | 247,600 | ||||
| Goodwill Adjustment | ||
| Gaining Ratio | 1:1 | |
| Total Value of Goodwill | 42,000 | |
| A's share of Goodwill | (42,000 x 1/3) | 14,000 |
| Distribution in Gaining Ratio | ||
| TO Be Adjusted from B's Capital A/c | (21,000 x 1/2) | 7,000 |
| TO Be Adjusted from C's Capital A/c | (21,000 x 1/2) | 7,000 |
| Adjustment Of Capital | ||
| Total Capital of new Firm | (66,000 + 46,000 + 87,000) | 199,000 |
| B's share of Capital | (1,99,000 x 1/2) | 99,500 |
| Existing Capital of X | 66,000 | |
| Cash brought in | (99500 -66000) | 33,500 |
| C's share of Capital | (1,99,000 x 1/2) | 99,500 |
| Existing Capital of Y | 46,000 | |
| Cash brought in | (99500 -46000) | 53,500 |
Regards