Page 160 - VIRANSH COACHING CLASSES

On 1 April 2019 Suvarna is admitted in the partnership on the following terms :
1 Suvarna to bring for 20% share in future Profits ` 45,000.
2 Goodwill of the firm is valued at ` 75,000.
3. RDD is no longer required.
4. Rent receivable ` 4,500 to be adjusted in the books.
5. Capital Accounts of partners to be adjusted in new profit sharing ratio by opening Current
Account Prepare : 1) Profit and Loss Adjustment Account 2) Partner’s Capital A/c and
3) New Balance Sheet.

Solution :
Dr. Profit and Loss Adjustment A/c Cr.

Particulars Amt Amt Particulars Amt
(`) (`) (`)
To Revaluation Profit Transferred to Capital A/c: By R.D.D. 3,000
Kabir 6000 By Rent Receivable 4,500
Reshma 1500 7500

7,500 7,500
Dr. Partner’s Capital Account Cr.

Particulars Kabir Reshma Suvarna Particulars Kabir Reshma Suvarna
(`) (`) (`) (`) (`) (`)
To Balance c/d 1,44,000 36,000 45,000 By Balance b/d 1,05,000 75,000
To Current A/c 3,000 49,500 By General Reserve A/c 24,000 6,000

By Profit and Loss A/c 4,800 1200
By Bank 45,000
By Goodwill A/c 7200 1,800

By P and L Adj A/c 6000 1,500
(Profit)
1,47,000 85,500 45,000 14,700 85,500 45,000

Balance Sheet as on 1.4. 2019
Liabilities Amount (`) Assets Amount (`)
Capital A/c Goodwill 75,000
Kabir 1,44,000 Sundry Debtors 30,000
Reshma 36,000 Land and Building 1,00,000
Suvarna 45,000 Bank 1,28,000
Current A/c Rent Receivable 4500
Kabir 3,000
Reshma 49,500

Creditors for goods 48,000
Creditors for expenses 12,000
3,37,500 3,37,500

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