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A,B and C are partners sharing profits a...

A,B and C are partners sharing profits and losses in the ratio of 2:3:5. On 31st March, 2019, their Balance Sheet was:

They admit D into the partnership on the following terms:
(a) Machinery is to be depreciated by 15%.
(b) Stock is to be revalued atRs 48,000.
(c) It is found that the Creditors included a sum ofRs 12,000 which was not to be paid.
(d) Outstanding Rent isRs 1,900.
(e) D is to bring inRs 6,000 as goodwill and sufficient capital for 2/5th share.
(f) The partners decided to use 10% of the profits every year in providing drinking water in schools, where required.
Prepare Revaluation Account, Partners' Capital Accounts, Cash Account and Balance Sheet of the new firm.

Text Solution

Verified by Experts

The correct Answer is:
Neither Gain (Profit) nor Loss on Revaluation; Capital A/cs:
A-Rs36,000; B-Rs44,000; C-Rs52,000; D-Rs88,000; Cash Balance -Rs1,12,000;
Balance Sheet Total-Rs2,95,900.
Calculation of D's Capital
`=Rs1,32,000 (i.e.,Rs 36,000+Rs44,000+Rs52,000) xx 5//3 xx 2//5 =Rs 88,000.`
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