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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet as on 31st March, 2015 showed: Creditors ₹50,000; Bills Payable ₹20,000; General Reserve ₹30,000; Capitals – A ₹1,00,000, B ₹50,000, C ₹25,000; and assets – Land ₹50,000, Building ₹50,000, Plant ₹1,00,000, Stock ₹40,000, Debtors ₹30,000, Bank ₹5,000. From 1st April, 2015, they decided to share profits equally. It was agreed that: (i) Goodwill be valued at ₹1,50,000; (ii) Land be revalued at ₹80,000 and building be depreciated by 6%; (iii) Creditors of ₹6,000 were not likely to be claimed and should be written off. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Building A/c (6% of 50,000) | 3,000 | By Land A/c | 30,000 |
| To Profit transferred to Capital A/cs: | By Creditors A/c | 6,000 | |
| A 16,500; B 11,000; C 5,500 | 33,000 | ||
| Total | 36,000 | Total | 36,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | A | B | C | Particulars (Cr.) | A | B | C |
|---|---|---|---|---|---|---|---|
| To A’s Capital A/c (Goodwill) | – | – | 25,000 | By Balance b/d | 1,00,000 | 50,000 | 25,000 |
| To Balance c/d | 1,56,500 | 71,000 | 10,500 | By Revaluation A/c (Profit) | 16,500 | 11,000 | 5,500 |
| By General Reserve A/c | 15,000 | 10,000 | 5,000 | ||||
| By C’s Capital A/c (Goodwill) | 25,000 | – | – | ||||
| Total | 1,56,500 | 71,000 | 35,500 | Total | 1,56,500 | 71,000 | 35,500 |
Balance Sheet as at 1st April, 2015
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capital A/cs: A 1,56,500; B 71,000; C 10,500 | 2,38,000 | Land (50,000 + 30,000) | 80,000 |
| Creditors (50,000 – 6,000) | 44,000 | Building (50,000 – 3,000) | 47,000 |
| Bills Payable | 20,000 | Plant | 1,00,000 |
| Stock | 40,000 | ||
| Debtors | 30,000 | ||
| Bank | 5,000 | ||
| Total | 3,02,000 | Total | 3,02,000 |
Working Note: Sacrifice / (Gain): A = 3/6 – 1/3 = 1/6 (Sacrifice); B = Nil; C = 1/6 – 1/3 = –1/6 (Gain). Goodwill adjustment = ₹1,50,000 × 1/6 = ₹25,000, paid by C (gainer) to A (sacrificer).
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 3 Q.29 - Change in Profit-Sharing Ratio Among the Existing Partners", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 3 - Change in Profit-Sharing Ratio Among the Existing Partners.
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