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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Raman and Rohit share profits in 2 : 1. Their Balance Sheet as at 31st March, 2018 showed: Capitals – Raman ₹1,40,000, Rohit ₹1,00,000; Workmen Compensation Fund ₹40,000; Creditors ₹1,60,000; and assets – Plant and Machinery ₹1,75,000, Furniture and Fixtures ₹65,000, Stock ₹47,000, Debtors ₹1,10,000 less Provision ₹7,000 (₹1,03,000), Bank ₹50,000. Saloni is admitted; Raman surrenders 2/5th and Rohit 1/5th of his share in her favour: (i) Plant and Machinery reduced by ₹35,000 and Furniture and Fixtures to ₹58,500; (ii) Provision for Doubtful Debts increased by ₹3,000; (iii) a claim of ₹16,000 for workmen’s compensation admitted; (iv) a ₹2,500 liability in creditors not likely to arise; (v) Saloni brings ₹42,000 goodwill premium and proportionate capital. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet. (CBSE 2019)
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Plant and Machinery A/c | 35,000 | By Creditors A/c | 2,500 |
| To Furniture and Fixtures A/c | 6,500 | By Loss (Raman 28,000; Rohit 14,000) | 42,000 |
| To Provision for Doubtful Debts A/c | 3,000 | ||
| Total | 44,500 | Total | 44,500 |
Partners’ Capital Accounts
| Particulars (Dr.) | Raman | Rohit | Saloni | Particulars (Cr.) | Raman | Rohit | Saloni |
|---|---|---|---|---|---|---|---|
| To Revaluation A/c (Loss) | 28,000 | 14,000 | – | By Balance b/d | 1,40,000 | 1,00,000 | – |
| To Balance c/d | 1,61,600 | 1,02,400 | 1,32,000 | By Premium for Goodwill A/c | 33,600 | 8,400 | – |
| By Workmen Compensation Fund | 16,000 | 8,000 | – | ||||
| By Bank A/c (Capital) | – | – | 1,32,000 | ||||
| Total | 1,89,600 | 1,16,400 | 1,32,000 | Total | 1,89,600 | 1,16,400 | 1,32,000 |
Balance Sheet after Saloni’s admission
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors (1,60,000 – 2,500) | 1,57,500 | Plant and Machinery (1,75,000 – 35,000) | 1,40,000 |
| Workmen Compensation Claim | 16,000 | Furniture and Fixtures | 58,500 |
| Capitals: Raman 1,61,600; Rohit 1,02,400; Saloni 1,32,000 | 3,96,000 | Stock | 47,000 |
| Debtors (1,10,000 – 10,000) | 1,00,000 | ||
| Bank (50,000 + 1,32,000 + 42,000) | 2,24,000 | ||
| Total | 5,69,500 | Total | 5,69,500 |
Working Note: New ratio = 6 : 4 : 5; sacrificing ratio 4 : 1 (premium: Raman ₹33,600; Rohit ₹8,400). Combined capital of Raman and Rohit = ₹2,64,000 for a 10/15 share → total capital ₹3,96,000; Saloni’s capital = ₹3,96,000 × 5/15 = ₹1,32,000.
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.
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