DEV BHOOMI INSTITUTE OF MANAGEMENT STUDIES, DEHRADUN

ASSIGNMENT SHEET

Course Name: Financial Accounting Assignment No. 1

Course Code: 104

Faculty :Ms. Shikha Sharma Branch: BBA Year : I

Unit/Title: 4/ Accounting for Partnership Date of

Date of Issue: Submission:

1. The following was the Balance Sheet of A, B and C sharing profits and losses in the
proportion of 6/14, 5/14 and 3/14 respectively:

They agreed to take D into partnership and give 1/8th share of profits on the following
terms:
(1) That D brings in Rs 48,000 as his capital.

(2) That furniture be written down by Rs 2,760 and stock be depreciated by 10%.

(3) That provision of Rs 3,960 be made for outstanding repair bills.

(4) That the value of land and buildings be written up to Rs 1,95,300.

(5) That the value of goodwill be fixed at Rs 28,000 and an adjustment entry be passed for D’s
share of goodwill.

(6) That the capitals of A,B and C be adjusted on the basis of D’s capital by opening current
accounts.
Give the necessary journal entries, and the balance sheet of the firm as newly constituted.

2. The balance sheet of a partnership firm of X and Y, who were sharing profits in the
ratio of 5: 3 respectively, as on 31st March, 2012 was as follows:

On the above date, Z was admitted on the following terms:

(i) Z would get 1/5th share in the profits.

(ii) Z would pay Rs 1,20,000 as capital and Rs 16,000 for his share of goodwill.

(iii) Machinery would be depreciated by 10% and building would to be appreciated by 30%. A
provision for bad debts @ 5% on debtors would be created. An unrecorded liability amounting to
X 3,000 for repairs to building would be recorded in the books of account.

(iv) Immediately after Z’s admission, goodwill account would be written off. Thereafter, the
capital accounts of the old partners would be adjusted through the necessary current accounts in
such a manner that the capital accounts of all the partners would be in their profit showing ratio.

Prepare revaluation account, capital accounts and the initial balance sheet of the new firm.

P, Q are R were partners sharing profits in the ratio of 5 : 3 : 2 respectively.

On 31st March, 2010 their balance sheet stood as follows:

Q retired as on the abovementioned date. It was agreed that:
ADVERTISEMENTS:

(i) The firm’s goodwill was worth Rs 250 thousand and Q was entitled to the credit for his share
of goodwill

(ii) P and R would continue to be partners but would share profits in future in the ratio of 7 : 3
respectively, and

(iii) The amount due to Q would be paid immediately and for this purpose P and R would bring
in cash in such a manner that the total capital of the reconstituted firm was Rs 1,000 thousand
and the capital accounts of the partners were in their new profit sharing ratio.

Assuming that all the above-mentioned conditions were fulfilled pass journal entries in the boobs
of the firm for all the transactions. Also, prepare the capital accounts of all the partners.

3.