[ Liabilities Capital Accounts; Ef Asses ildi 7 : Raw ion Land & Buildings 2,00,000 Ratu 00,000. Machinery 2,00,000 R 7 2,00,000 Closing Stock: 1,00,000 i it 1,00,000 6,00,000 Sundry Debtors 2,00,000 Sundry Creditors 2,00,000 | Cash and Bank Balances 1,00,000 L 8,00,000 | __ | 800,000 On 31st March, 2016, Ram desired to retire from the firm and tl ini je . revalue the Assets and Liabilities on that date on the followin aiing Partners decided to carry on, It was agreed to 1. Land and Buildings be appreciated by 309%, Machinery be depreciated by 20%, Closing stock to be valued at & 80,000. Provision for bad debts be made at 5%. Old credit balances of Sundry Creditors = 10,000 be written back. . ‘ licy of the partners surrendered and cash obtained % 60,000. Joint Life Foley Oe firm be valued at 180,000 cea Ram's share of the Goodwill be adjusted in the Accounts of Goodwill of the en iho share the future profits equally. Rahul and Rohit wis to be the sanie as before retirement, Indivdva capital be in their profit sharing ratio, 8. Total capital ofthe firm! © tled on the following basis Sokon retirement & the balance 50% within 1 year 9. Amount due to Ram Is Capital Account of Partners, Rahul & Rohit, Loan Account of Ram, Cash Account and Balance . t a OM e Rahul and Rohit. 2. 3. 4. 5. 6. ne Prepare Rev Sheet as on 1.4.1Allustration 20.31 : Dowell & Co.isa partnership firm with partners Mr. A, Mr. B and Mr. C, sharing profits and lossesin the ratio of 10:6:4. The Balance Sheet of the firm as at 31st March, 2016 is as under: [ Liabitities 7] Assets | Capital: T Land 10.000 Mr.A 80,000 Buildings 2,00,000 Mr.B 20,000 Plant and Machinery 130,000 Mr. C 30,000 130,000 | Furniture 43,000 Reserves (Un-appropriated Profit) 20,000 | Investments 12,000 Long Term Debt 3,00,000 | Stock 130,000 Bank Overdraft 44,000 | Debtors 139,000 Trade Creditors 1,70,000 Total _ 6,64,000 | Total 664000 | It was mutually agreed that Mr. B will retire from partnership and in his place Mr. D will be admitted as apartner with effect from Ist April, 2016. For this purpose, the following adjustments are to be made: i Goodwill is to be valued at @1 lakh but the same will not appear as an asset in the books of the reconstituted fim. ii, Buildings and Plant & Machinery are to be depreciated by 5 per cent'and 20 per cent respectively. Investments are to be taken over by the retiring partner at@15,000. Provision of 20 per centis to be made on debtors to cover doubtful debts. iii. In the reconstituted firm, the total capital will be @2 lakhs which will be contributed by Mr. A, Mr. C and Mr. Din their new profit sharing ratio, which is 2:2:1, iv. The surplus funds, if any, will be used for repaying the Bank Overdraft. v. The amount due to the retiring partner shall be transferred to his loan account. Pof the firm as on 1-1-2016 was as follows: ee . — Illustration 20.32: X, Y and Z are partners sharing profits and losses in the proportion of 3:2:2 respectively. The BalanceShe, Liabilities @ | Assets é Capital Accounts: Plant and Machinery 36,000 Furniture 14,000 X 50,000 Stock 56,000 Y 40,000 Sundry Debtors 48,000 . Z 35,000 1,25,000 |’ Cash-at-Bank 9,000 Bank overdraft 10,000 Sundry Creditors 28,000 1,63,000. 1,63,000 X retired on 1-1-2016, on which date R is admitted as a new partner. partners, goodwill to be valued at %42,000 and Sundry Debtors and st: X is to receive %22,000 in cash on the date of retirement and the bala of loan to be made at the end of each year by annual instalments repr on loan. Risto bring in 50,000 in cash as his capital on the date of admission. after paying the interest on X’s loan. For the purpose of adjusting the rights as between dd ‘ock to be reduced by %8,000 and to 50,000 respectively. nce due tohim isto remain as loan at 8% p.a. Repayment esenting 25% of the future profit before chargingintérest The new partners are to share profits and losses equally The net profit for the year ended 31st Dec.2016, is % 32,000 before taking into account the instalment payable to X. You are required to show : (a) Profit and Loss Appropriation Account for the year ended 31st Dec., 2016. (d) Capital Accounts of the new partners; and (c) X’s Loan Account as on 31st Dec., 2016.18 stood 1. Their Balance Sheet as at 31st March, 20 @ | Assets 7 8,00,000 nee 10,00,000 B 4,20,000 ‘urniture. 2,40,000 Cc 4,00,0 Office equipments 2,80,000 P0000 |16,20,000 | Stock 2,50,000 sundry Creditors 3,70,000 | si - General Reserves we sundry debtors 3,00,000 3,60,000 | Less: Provision for . Doubiful debts 30,000 | 2,70,000 Joint life policy 1,60,000 Cash at Bank 1,50,000 23,50,000 23,50,000 Bretired on 1st April, 2018 subject to the following conditions: (i) Office Equipments revalued at % 3,27,000. (ii) Building revalued at & 15,00,000. Furniture is written down by % 40,000 and Stock is reduced to & 2,00,000. (iii) Provision for Doubtful Debts is to be created @ 5% on Debtors. (iv) Joint Life Policy will appear in the Balance Sheet at surrender value after B's retirement. The surrender value is @ 1,50,000. (0) Goodwill was to be valued at 3 years purchase of average 4 years profit which were: z a 90,000 2014 1,40,000 2015 1,20,000 2016 1,30,000 2017 L jount due to B is t ferred to his Loan Account, i pe transferred to his Li (vi) Amount due to Bi + Capital Accounts and the Balance Sheet immediately after B'sretirement. unt. Partners! [May 2018, 5 Marks] Prepare the Revaluation Acco! 0Q.2 Dinesh, Ramesh and Naresh are partners in a firm sharing profits and losses in the ratio of 3 : 2: 1. Their Balance Sheet as on 31st March, 2018 is as below : | Liabilities (2) | Assets | (9) Trade Payables 22,500 | Land & Buildings 37,000 Outstanding Liabilities 2,200 | Furniture & Fixtures 7,200 General Reserve 7,800 | Closing stock 12,600a0,08 PARTNERSHIP [ Liabilities () | Assels Capital Accounts : Trade Receivables Dinesh : 15,000 Cash in hand Ramesh 15,000 Cash at Bank Naresh 10,000 40,000 72,500 72,500 The partners have agreed to take Suresh as a partner with effect from Ist April, 2018 on the following terms : (i) Suresh shall bring % 8,000 towards his capital. , (ii) The value of stock to be increased to = 14,000 and Furniture & Fixtures to be depreciated by 10%. ili) Reserve for bad and doubtful debts should be provided at 5% of the Trade Receivables. (iv) The value of Land & Buildings to be increased by % 5,600 and the value of the goodwill be fixed at = 18,000. (v) Th rofit sharing ratio shall be divided equally among the partners. es ) The new p iiabilities include 700 due to Ram which has been paid by Dinesh. Necessary entries were not made e outstanding liabilit , a, it’ ital Accounts of the Partners, (iii) Balance Sheet of the firm after admission Prepare (i) Revaluation Account, (ii) Capi [Nov. 2018] af C.-L1 —L ante ( 0.3 Monika, Yedhant and Zoya are in partnership, sharing profits and losses equally. Zoya died on 30th June 2018, The Balance Sheet of Firm as at 31st March 2018 stood as. Liabilities Amount | Assets Creditors 20,000 | Land and Building General Reserve 12,000 | Investments Capital Accounts : Stock in trade 1,00,000 | Trade receivables 35,000 75,000 | Less: Provision for doubtful debt 2,000 75,000 | Cash in hand . Cash at bank 2,82,000 2,82,000 In order to arrive at the balance due to Zoya, it was mutually agreed that: (i) Land and Building be valued at Rs. 1,75,000 (ii) Debtors were all good, no provision is required . (/M) Stock is valued at Rs. 13,500(iv) Goodwill will be valued at one Year's purchase of the goodwill be adjusted in the account of Monika and Ye average profit of the past five years, dhant. (v) Zoya’s share of profit from 1st April 2018, to the date of death be calculated preceding three years. (vi) The profit of the preceding five years ended 31st March were : Zoya’s share of on the basis of average profit of I | 2018 2017 2016 I 2015 2a | 25,000 20,000 22,500 | 35,000 a You are required to prepare : (1) Revaluation account : (2) Capital accounts of the partners an a (3) Balance sheet of the Firm as at 1st July 2018.