In the Books of M/s.

Devang, Dev, Dipesh

Dr. Revaluation Account/ Profit and Loss Adjustment Account Cr.
Particulars Amt. (₹) Amt. (₹) Particulars
To Plant and Machinery A/c 5,000 By Furniture A/c
To Provision for Doubtful Debtors A/c 1,000
To Unrecorded Liability A/c 2,000

By Revaluation Loss distributed among

partners in Old Ratio
- Devang's Capital A/c
- Dev's Capital A/c

8,000
 H077
nt Cr.
Amt. (₹) Amt. (₹)
4,000

2000
2000 4000

8,000
 In the Books of Devang, Dev, Dipesh
Dr. Partners' Capital Account
Particulars Devang Dev Dipesh Particulars
To Revaluation A/c (Loss) 2,000 2,000 - By Balance b/d
By Cash A/c
By Goodwill A/c
By General Reserves A/c

To Balance c/d 24,000 24,000 16,000

By Current A/c

26,000 26,000 16,000

 Cr.
Devang Dev Dipesh
6,000 6,000 -
- - 16,000
4,000 4,000 -
4,000 4,000 -

12,000 12,000 -

26,000 26,000 16,000

Dr. Cash Account
Date Particulars J.F. Amount (₹) Date
2019 2019
To Balance b/d 2,000
To Dipesh's Capital A/c 16,000
To Cash A/c 8,000

26,000
 Cr.
Particulars J.F. Amount (₹)

By Balance c/d 26,000

26,000
Dr. Goodwill Account
Date Particulars J.F. Amount (₹) Date
2019 2019
To Devang's Capital A/c 4,000
To Dev's Capital A/c 4,000

8,000
t Cr.
Particulars J.F. Amount (₹)

By Cash A/c 8,000

8,000
 In the Books of M/s. Devang, Dev, Dipesh
Balance Sheet as on 31st March, 2019
Liabilities Amt. (₹) Amt. (₹) Assets
Capital Accounts Furniture
- Devang 24,000 Add: Revaluation
- Dev 24,000 Plant and Machinery
- Dipesh 16,000 64,000 Less: Revaluation
Debtors
Sundry Creditors 8,000 Less: Provision for Doubtful Debts
Unrecorded Liability 2,000 Stock
Bills Payable 4,000 Cash
Partners' Current Accounts
Devang's Current A/c
Dev's Current A/c

78,000
 H077

Amt. (₹) Amt. (₹)

4,000
4,000 8,000
14,000
-5,000 9,000
10,000
-1000 9,000
2,000
26,000

12,000
12,000 24,000

78,000
 In the books of Devang, Dev, Dipesh
H077 Journal Entries
2019 Particulars L.F.
01 Cash A/c Dr.
To Dipesh's Capital A/c
(Being cash brought in by Dipesh as Capital)
02 Cash A/c Dr.
To Dipesh's Capital A/c
(Being cash brought in by Dipesh as Goodwill)
03 Goodwill A/c Dr.
To A's Capital A/c
To B's Capital A/c
(Being Goodwill divided between the Old Partners in Old Profit Sharing Ratio)
04 General Reserves A/c Dr.
To Devang's Capital A/c
To Dev's Capital A/c
(Being Reserve Fund transferred to Partner's Capital Account)
05 Revaluation A/c Dr.
To Plant and Machinery A/c
(Being decrease in Value of Plant and Machinery on Revaluation)
06 Revaluation A/c Dr.
To Provision on Doubtful Debts A/c
(Being decrease in Value of Provision on Doubtful Debt on Revaluation)
07 Furniture A/c Dr.
To Revaluation A/c
(Being increase in the Value of Furniture on Revaluation)
08 Revaluation A/c Dr.
To Unrecorded Liability A/c
(Being Provision made for Unrecorded Liability )
09 Devang's Current A/c Dr.
Dev's Current A/c Dr.
To Devang's Capital A/c
To Dev's Capital A/c
(Being Capital account transferred to Current account)
10 Devang's Capital A/c Dr.
Dev's Capital A/c Dr.
To Revaluation A/c
(Being profit on Revaluation transferred to Partners Capital Account)
TOTAL
Debit (₹) Credit (₹)
16,000
16,000

8,000
8,000

8,000
4,000
4,000

8,000
4,000
4,000

5,000
5,000

1,000
1,000

4,000
4,000

2,000
2,000

12,000
12,000
12,000
12,000

2,000
2,000
4,000

80,000 80,000
 Working Notes
Calculation of of New Profit Sharing Ratio and Sacrificing Ratio
OLD RATIO = 1:1
New Partner's Ratio = 1/4
Remaining Ratio = 3/4
A's New Share = 1/2*3/4 = 3/8
B's New Share = 1/2*3/4 = 3/8
C's Share = 1/4 = 2/8

NEW RATIO = 3:3:2

Sacrificing Ratio = Old Ratio - New Ratio
A's Sacrificing Ratio = 1/2 - 3/8 = 1/8
B's Sacrificing Ratio = 1/2 - 3/8 = 1/8

SACRIFICING RATIO = 1:1

Furniture Revaluation
100/100*4,000 = 4,000

Provision for Doubtful Debts

10/100*10,000 = 1,000