Published on August 20, 2014
Solution 1 Books of Dinesh, Yamine, Farte and Anie REVALUATION ACCOUNT PARTNERS' CAPITAL ACCOUNTS BALANCE SHEET as at 31.12.2001 Q.2 X and Y are partners as they share profits in the proportion of 3:1 their balance sheet as at 31.03.07 as follows. BALANCE SHEET Liabilities Rs. Assets Rs. Capital Account Land 1,65,000 X 1,76,000 Furniture 24,500 Y 1,45,200 Stock 1,32,000 Creditors 91,300 Debtors 35,200 Bills Receivable 28,600 Cash 27,500 4,12,500 4,12,500 On the same date, Z is admitted into partnership for 1/5 th share on the following terms a. Goodwill is to be valued at 3½ years purchase of average profits of last for year which were Rs. 20,000 Rs. 17,000 Rs. 9,000 (Loss) respectively. ٠ Stock is fund to be overvalue by Rs. 2,000 Furniture is reduced and Land to be appreciated by 10% each, a provision for Bad Debts @ 12% is to be created on Debtors and a Provision of Discount of Creditors @ 4% is to be created. ٠ A liability to the extent of Rs. 1,500 should be created for a claim against the firm for damages. ٠ An item of Rs. 1,000 included in Creditors is not likely to be claimed, and hence it should be written off. Prepare Revaluation Account, Partners: Capital Accounts and Balance Sheet of the new firm if Z is to contribute proportionate capital and goodwill. The capital of partners are to be in profit sharing ratio by opening current Accounts. Solution 2 BOOK OF X, Y AND Z REVALUATION ACCOUNT Dr. Cr.