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Shikhar and Rohit were partners in a fir...

Shikhar and Rohit were partners in a firm sharing profits in the ratio of 7:3. On 1st April, 2013, they admitted Kavi as a new partner for 1/4th share in profits of the firm. Kavi broughtRs 4,30,000 as his capital andRs 25,000 for his share of goodwill premium. The Balance sheet of Shikhar and Rohit as on 1st April, 2013 was as follows:

It was agreed that:
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of Machinery will be depreciated by 10%.
(c) the liabilities of Workmen's Compensation Fund were determined atRs 50,000.
(d) capitals of Shikhar and Rohit will be adjusted on the basis of Kavi's Capital and actual cash to be brought in or to be paid off as the case may be.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.

Text Solution

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The correct Answer is:
Gain (Profit) on Revaluation-Rs25,000; Capital A/cs: Shikhar-Rs9,03,000; Rohit-Rs3,87,000;
Kavi-Rs4,30,000; Shikhar will withdraw-Rs37,000 and Rohit will withdraw-
Rs 23,000; Balance Sheet Total-Rs19,20,000.
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