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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
The Balance Sheet of Asha, Deepa and Leta, sharing profits in the ratio of 5 : 3 : 2, as at 31st March, 2025 showed Creditors ₹50,000, Employees’ Provident Fund ₹10,000, Profit and Loss A/c (Cr., i.e. accumulated profit) ₹85,000, Capitals – Asha ₹40,000, Deepa ₹62,000, Leta ₹33,000; Cash at Bank ₹40,000, Sundry Debtors ₹1,00,000, Stock ₹80,000, Fixed Assets ₹60,000. Asha retired on 1st April, 2025 and Deepa and Leta decided to share future profits in the ratio of 3 : 2. Other terms: (a) Goodwill of the firm valued at ₹80,000. (b) Fixed Assets to be depreciated to ₹57,500. (c) Provision for Doubtful Debts to be made at 5% on Debtors. (d) A liability for a claim, included in Creditors for ₹10,000, is settled at ₹8,000. The amount payable to Asha is to be paid by Deepa and Leta in such a way that their capitals become proportionate to their profit-sharing ratio, leaving a balance of ₹15,000 in the Bank Account. Prepare the Revaluation Account and Partners’ Capital Accounts.
REVALUATION ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Fixed Assets A/c (60,000 – 57,500) | 2,500 | By Creditors A/c (10,000 – 8,000) | 2,000 |
| To Provision for Doubtful Debts A/c | 5,000 | By Loss transferred to: | |
| Asha’s Capital A/c 2,750 | |||
| Deepa’s Capital A/c 1,650 | |||
| Leta’s Capital A/c 1,100 | 5,500 | ||
| Total | 7,500 | Total | 7,500 |
PARTNERS’ CAPITAL ACCOUNTS
| Particulars | Asha | Deepa | Leta | Particulars | Asha | Deepa | Leta |
|---|---|---|---|---|---|---|---|
| To Revaluation A/c (Loss) | 2,750 | 1,650 | 1,100 | By Balance b/d | 40,000 | 62,000 | 33,000 |
| To Balance c/d | 1,19,750 | 61,850 | 32,900 | By Profit and Loss A/c | 42,500 | 25,500 | 17,000 |
| By Deepa’s Capital A/c | 24,000 | – | – | ||||
| By Leta’s Capital A/c | 16,000 | – | – | ||||
| Total | 1,22,500 | 87,500 | 50,000† | Total | 1,22,500 | 87,500 | 50,000† |
| To Bank A/c | 1,19,750 | By Balance b/d | 1,19,750 | 61,850 | 32,900 | ||
| To Balance c/d | 1,18,500 | 79,000 | By Bank A/c | 56,650 | 46,100 | ||
| Total | 1,19,750 | 1,18,500 | 79,000 | Total | 1,19,750 | 1,18,500 | 79,000 |
Working Notes: Gaining ratio (Deepa : Leta) = 3 : 2. Asha’s share of goodwill = 80,000 × 5/10 = ₹40,000, borne by Deepa (₹24,000) and Leta (₹16,000). Accumulated Profit & Loss A/c ₹85,000 distributed in the old ratio 5 : 3 : 2. Total capital of the new firm = 1,19,750 (Asha) + 61,850 (Deepa) + 32,900 (Leta) + 15,000 (desired bank balance) – 32,000 (available bank balance after settling the creditor claim) = ₹1,97,500, split 3 : 2: Deepa ₹1,18,500 (brings in ₹56,650), Leta ₹79,000 (brings in ₹46,100).
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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