Question 98 Chapter 5 of +2-A
Table of Contents
98. Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2019 was:
| Liabilities | Assets | ||||
| Mohan’s Capital | 2,000 | Plant | 650 | ||
| Sohan’s Capital | 1,000 | 3,000 | Cash | 650 | |
| Creditors | 400 | Debtors | 1,000 | ||
| Less: Provision for Doubtful Debts | 400 | 600 | |||
| Stock | 1,500 | ||||
| 3,400 | 3,400 |
They admit Rohan to a 1/3rd share upon the terms that he is to pay into the business 1,000 as Goodwill and sufficient Capital to give him a 1/3rd share of the total capital of the new firm. It was agreed that the Provision for Doubtful Debts be reduced to 100 and the Stock be revalued at 2,000 and that the Plant be reduced to 500. You are required to record the above in the Ledger of the firm and show Balance Sheet of the new partnership.
The solution of Question 98 Chapter 5 of +2-A: –
| Revaluation Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Plant | 150 | Reserve for Doubtful Debt | (400 – 100 | 300 | |
| Stock | 500 | ||||
| Profit on Revaluation | |||||
| Mohan Capital | 390 | ||||
| Sohan Capital | 260 | 650 | |||
| 800 | 800 | ||||
| Partners’ Capital Account |
|||||||
| Parti culars |
Mohan | Sohan | Rohan |
Partic |
Mohan | Sohan | Rohan |
| By Balance B/d | 2,000 | 1,000 | – | ||||
| By Revaluation | 390 | 260 |
– |
||||
| By Premium for Goodwill | 600 | 400 | – | ||||
| To Balance c/d | 2,990 | 1,660 | – | ||||
| 2,990 | 1,660 | – | 2,990 | 1,660 | – | ||
| By Balance B/d | 2,990 | 1,660 | – | ||||
| By Bank A/c | – | – | 2,325 | ||||
| To Balance c/d |
2,990 |
1,660 |
2,325 |
||||
| 2,990 | 1,660 | 2,325 | 2,990 | 1,660 | 2,325 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors | 40 | Cash | 3,975 | ||
| Debtors | 1,000 | ||||
| Capital: | Less: Reserve for D. Debt | 100 | 900 | ||
| Mohan | 2,85,000 | Stock | 2,000 | ||
| Sohan | 1,65,000 | Plant | 500 | ||
| Rohan | 3,00,000 | 7,50,000 | |||
| 7,375 | 7,375 | ||||
Working Note:-
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