Professional Documents
Culture Documents
1. Arun and Aashish are partners in a firm sharing profits and losses in the ratio of 3:2. They
decided to admit Chanda as a new partner into firm. Chanda agreed to transfer her
building into firm's name as her share of capital and for a part of premium of goodwill at
an agreed price of Rs. 3,25,000. New profit sharing ratio was agreed among Arun,
Aashish and Chanda at 4:3:3.Chanda has also paid Rs. 20,000 in cash, personally to
Aashish for the sacrifice of his share of profits in favour of her. Chanda's capital was
agreed at Rsl 3,00,000 in new firm. Record necessary journal entries at the time of
admission of Chanda.
2. Aashu, Bittu and Chandu were partners in a firm sharing profits and losses in the ratio of
5:3:2 respectively. They admitted Deepu as a new partner into firm for 25% share in
profits. Aashu agreed to sacrifice 10 % of his share in favour of Deepu. Bittu agreed to
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sacrifice 33 2 % of his share in favour of Deepu. Calculate new profit sharing ratio and
sacrificing ratio.
3. Sachin, Rahul and Sourabh are partners in a firm sharing profits and losses in the ratio of
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5:3:2. They decided to admit Yuvraj into partnership with share in profits. Sachin
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agreed to sacrifice 10 𝑡ℎ of his share in favour of Yuvraj. Yuvraj acquired 5 𝑡ℎ of his share
from Sourabh. Yuvraj brings in ₹ 2,00,000 as his capital and he also promises to bring
in the necessary amount for his share of goodwill. On the date of admission, the goodwill
of the firm has been valued at Rs. 60,000 and the goodwill account already appears in the
books at Rs. 35,000. Calculate new profit sharing ratio, sacrificing ratio and record the
necessary journal entries in the books of the firm.
4. Ajay and Bhanu are partners in a firm sharing profits and losses in the ratio of 2:1. Chintu
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is admitted into the firm on Ist April, 2018 with 4 𝑡ℎ shar ein profits of the firm, which he
gets equally from Ajay and Bhanu. Chintu will bring cash for his share of goodwill
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which would be based on 2 2 year’s purchase of the average profits of past four years.
Chintu will also bring proportionate capital according to his share in the profits of the
firm. Balance sheet of Ajay and Bhanu on March 31, 2018 was as follows :
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Liabilities Amount (Rs.) Assets Amount Rs.)
Creditors 40,000 Cash at Bank 60,000
Bills Payable 20,000 Debtors 40,000
General Reserve 30,000 Inventory 50,000
capitals Furniture 25,000
Ajay : 2,50,000 Machinery 1,25,000
Bhanu : 1,60,000 4,10,000 Building 40,000
Land 1,60,000
5,00,000 5,00,000
It was also decided that:
i. Building was to be valued at Rs. 70,000 and machinery at Rs. 1,10,000.
ii. A provision for bad debts is to be created @ 5% on trade receivable.
iii. Inventory is found undervalued by 20 %.
iv. Creditors were unrecorded to the extent of Rs. 5,000.
v. Profits for the past four years were :
Year Rs.
2014- 85,000
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2015- 1,65,000
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2016- 1,50,000
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2017- 2,00,000
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vi. Ajay and Bhanu have decided to make their capital proportionate to their new profit
sharing ratio. For this, necessary cash was to be brought in or paid off to the partners as the
case may be. It was also agreed that capitals of Ajay and Bhanu will be adjusted on the
basis of Chintu's Capital.
5. Aradhya and Ayaan are partners in a firm sharing profits and losses in the ratio of 4:1.
On March 31, 2018, their balance sheet was as follows :
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Liabilities Amount (Rs.) Assets Amount
(Rs.)
Sundry Creditors 80,000 Cash 8,000
Provision for Doubtful 5,000 Debtors 1,00,000
Debt 80,000 Stock 50,000
Workman's 10,000 Machinery 72,000
Compensation reserve 25,000 Land 1,80,000
Bank Overdraft Buildings 1,20,000
Capitals : Patents 20,000
Aradhya : 2,40,000 3,60,000 Profit & Loss a/c 10,000
Ayaan : 1,20,000 5,60,000 5,60,000
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On the above date. Lakshit admitted for 4 𝑡ℎ share in the profits and Losses on the following
terms :
i. Lakshit will bring Rs. 1,50,000 for his Capital by Bank Draft.
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ii. Lakshit will bring furniture for 3 part of his share in good will.
iii. Debtors Rs. 3,000 will be written of as bad debts and a provision of 5 % will be created
on debtors for bad and doubtful debts.
iv. Creditors were unrewarded to the entrant of Rs. 4,000.
v. Stock is found overvalued by Rs. 5,000.
vi. Patents to be amortized up to 40 %.
vii. There is a claim of Rs. 30,000 for workmen compensation.
viii. Goodwill is to be valued at Rs. 48,000.
ix. Expanses debited in the profit and loss Account includes a sum of Rs. 2,000 paid for
Aradhaya's personal expenses.
Record journal entries for the above transactions and reconstituted balance sheet of the firm.
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6. Deepak and Disha are partners in a firm sharing profits and losses in the ratio of 5:3.
Their Balance as at March31, 2018 was as follows :
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry Creditors 48,000 Cash at Bank 14,000
Workmen 36,000 Debtors 75,000
compensation Claim 56,000 Less: Reserve for Doubtful
General Reserve Debts 5,000 70,000
Capital A/c: Stock 40,000
Deepak : 2,50,000 Investment 80,000
Dish : 2,00,000 4,50,000 Plant and Machinery 2,00,000
Good will 24,000
5,90,000 5,90,000
On April 01, 2018 they agreed to admit Dinesh into partnership on the following terms :
i. Provision for doubtful debts would be increased by Rs. 1,000.
ii. The Liability against the workman compensation Reserve is determined at Rs. 40,000.
iii. Stock is undervalued by Rs. 4,000.
iv. A Debtors whose dues of Rs. 3,000 were written off as bad debts paid Rs. 2,400 in full
settlement.
v. Disha takes over half of investment at an agreed value of Rs. 50,000.
vi. Dinesh provides Rs. 50,000 Loan to the firm @ 10 % p.a.
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vii. Disha will sacrifice 3 𝑟𝑑 of her share while Dinesh acquire 6 𝑡ℎ from Deepak.
viii. Firm goodwill valued at Rs. 90,000. Dinesh bring Rs. 6000 out of his share.
ix. Dinesh will bring Rs. 2, 50,000 as his Capital.
x. The capital Accounts of the partners will be adjusted on the basis of Dinesh's Capital
through their current Accounts.
You are required to prepare revaluation account, partner's capital accounts and the
balance sheet of the reconstituted firm.
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7. Vishu and Vikas are partners in a firm sharing profits and losses in the ratio of 3:2 on
March 31, 2018. The balances in their books stood as follows: :
from Vishu.
ii. Total capital of the reconstituted firm is fixed Rs. 6,00,000.
iii. The Goodwill of the firm valued at Rs. 72,000.
iv. A Bill receivable of Rs. 2,000 which was discounted with the bank is dishonoured.
v. Revaluation expanses Rs. 500 on reconstitution of the firm paid b Vishu, a partner on
behalf of firm.
vi. Half of Investment taken over by Vikas at 40 % more than Book value and remaining
investment valued at Rs. 50,000.
vii. Stock is undervalued by Rs. 3,000.
The capital Accounts of all the partners will be adjusted in the new profit sharing ratio by
bringing in or paying off cash as may be pass necessary Journal entries and prepare necessary
Ledger and Balance sheet of reconstituted firm.
8. Barkha and Babita are partners in a firm sharing profits in the ratio of 2:1. Harpal is
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admitted into the firm w.e.f April 01, 2018 with 4 𝑡ℎ share in profits. He will bring in Rs.
80,000 as capital. Capitals of Barkha and Babita are to be adjusted as per profit sharing
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ratio. The new profit sharing ratio will be 8:7:5. The balances in the books of accounts of
Barkha and Babita as at March 31, 2018 are as follows:
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry Creditors 20,000 Cash at Bank 60,000
Bills Payables 10,000 Sundry Debtors 80,000
General Reserve 60,000 Bills Receivable 20,000
Capital a/c Stock 80,000
Barkha : 2,00,000 Fixed Assets 2,00,000
Babita : 1,50,000 3,50,000
4,40,000 4,40,000
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5,91,000 5,91,000
6,04,000 6,04,000
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Neetu is admitted as a partner for share on April 1, 2018, under the following terms.
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vii. Koina will bring amount for capital equal to 30 % of combined capital of Saira,
Amit and Sameer capital.
12. Following information relates to Seema and Jyoti as at March 31, 2018 of, who share
profits and losses in the ratio of 1:2.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Capital a/c Goodwill 30,000
Seema: 80,000 Plant and Machinery 70,000
Jyoti : 1,20,000 2,00,000 Land and Building 1,30,000
General reserve 60,000 Furniture & Fixtures 40,000
Workman compensation Debtors 20,000
Reserve 12,000 Stock 25,000
Creditors 98,000 Cash at bank 15,000
Bills Payable 12,000
Provision for doubtful 2,000
debts
6. The Capital Accounts of the partners will be adjusted on the basis of Yuvraj's Ccapital
through their current accounts.
Prepare revaluation Account, partner's capital accounts and balance sheet of reconstituted firm.
Give journal entry for good will also.
13. Following is the Balance Sheet at March 31, 2018 of Priyanka and Alia.
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Balance Sheet of Priyanka Alia as at March 31, 2018
Liabilities Amount (₹) Assets Amount (₹)
Sundry Creditors 62,000 Cash at Bank 9,000
Bills Payables 24,000 Debtors 30,000
General Reserve 36,000 Bills Receivable 12,000
investment Fluctuation Fund 12,000 Stock 18,000
Capital A/Cs: Investment 1,50,000
Priyanka : 1,80,000 Land & Building 200,000
Alia : 1,20,000 3,00,000 Good will 15,000
4,34,000 4,34,000
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On April 1, 2018, Katrina admitted for 4 𝑡ℎ share in profit blogs on the following terms :
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Sundry Creditors 18,000 Bank Balance 20,000
Bills Payables 6,000 Bills Receivable 30,000
General Reserve 60,000 Debtors : 45000 40,000
Workman Companion Reserve 12,000 Less Provision : 5000 3,60,000
Current A/Cs Stock 2,00,000
Sehwag : 6,000 Furniture 5,00,000
Dhoni : 2,000 8,000 Plant Machinery 3,00,000
Capital A/Cs Land & Building 36,000
Sachin : 2,00,000 Profit & Loss A/C 18,000
Sehwag : 4,00,000 Good will
Dhoni : 8,00,000 14,00,000
15,04,000 15,04,000
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Sundry Creditors 60,000 cash at bank 40,000
Provision for Doubtful Debts 10,000 Debtors 90,000
Outstanding Expenses 20,000 Stock 3,50,000
General Reserve 1,00,000 Furniture 1,20,000
Capitals : Plant and Machinery 2,50,000
Chetna : 5,00,000 Profit & Loss A/C 15,000
Disha : 2,00,000 7,00,000 Good will 25,000
8,90,000 8,90,000
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On April 1, 2018 Charu admitted for 4 𝑡ℎ share in the profits on the following terms :
1. Charu will bring ₹2,50,000 as her Capital and ₹ 20,000 out of 25000 share of good
willHalf of Goodwill bring in cash withdrawn by sacrificing partners.
2. Debtors of ₹ 10,000 will be written off as bad debts and a provision of 5 % will be
created on debtors for bad and doubtful debts.
3. Stock will reduced by 20% furniture will be appreciated by 10 % and Plant & Machinery
depreciated by ₹ 20,000.
4. A Claim for workman compensation was ₹ 8000.
5. Investment of ₹ 4,000 not shown in the Balance sheet will be taken into account.
6. Partners will share future profits in the ratio of 5:4:3.
7. Capital Accounts of the partners will be adjusted on the basis of charu's Capital in their
profits sharing ratio by opening current Accounts.
Record necessary journal entries and prepare Revaluation Account, Partners capital A/Cs
and Balance Sheet of Reconstituted Firm.
16. Sankalp, Devam and Aradhya are partners in a firm sharing profits in the ratio of 7:8:5.
On March 31, 2018, Their Balance Sheet is as follows :
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Sankalp : 1,20,000 Bills Receivable 24,000
Devam : 1,00,000 Furniture Plant & 100,000
Aradhya : 2,00,000 4,20,000 Machinery 1,90,000
Plant & Machinery 2,00,000
Land & Machinery 30,000
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7,40,000 Suspense A/C 7,40,000
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On April 1, 2018, Ayaan Admitted as a partner for 7 𝑡ℎ share in the profits on the following
terms :
1. The value of Plant & Machinery and Plant & Machinery to be appreciated to ₹ 2,00,000
and ₹ 2,50,000 respectively.
2. The Liabilities of workman's Compensation Fund was determined at ₹ 60,000.
3. The stock is overvalued by 20%.
4. A debtors owning ₹ 10,000 became in solvent, no amount is received from his assets.
5. Ayan will bring ₹ 60,000 for premium for goodwill out of 70,000.
6. Ayaan will bring proportionate capital in the firm. The Capital of the Existing partners
also be adjusted in their profit sharing ratio on the basis of Ayaan Capital.
Prepare Revaluation Account, Partners' Capital Account and Balance Sheet of reconstituted firm.
17. Anil, Rajesh and Sudhir are partners in a firm sharing profits & Losses in the ratio of
4:3:2. The Balance Sheet on March 31, 2018 was as follows :
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1. Narender will bring ₹ 50,000 as his goodwill. The valuation of firm goodwill is ₹
2,50,000.
2. Narender will bring 20 % of the Combined Capital of Anil, Rajesh and Sudhir.
3. Market value of Investment is ₹ 80,000.
4. Stock is to be appreciated to ₹ 1,00,000.
5. Patents are worthless.
6. Anil's Loan to be repaid with ₹ 2500 interest which was not charged to profit loss.
Record necessary journal entries and prepare Revaluation Account, Partners Capital A/C and
Balance sheet of Reconstituted firm.
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